Checklists: Homer Simpson’s Moment of Clarity on Medical Quality

Accountants do it – Attorneys do it – Why Not Docs?

By Dr. David Edward Marcinko; MBA, CPHQ, CMP™insurance-book2

Like the Nike slogan, hospitals should just do-it! Make checklists, that is! A new report by the Associated Press, on January 15, 2009, suggests simple checklists might improve medical quality and save hospitals $15 billion a year.  

NEJM Study

The study was led by Atul Gawande MD, now a Harvard surgeon and medical journalist, and just published in the New England Journal of Medicine [NEJM]. The 19-item checklist, used in the study, was far more detailed than what is required for most institutions. In summary, doctors who followed a checklist of steps cut death rates from surgery, almost in half, and complications by more than a third in a large study on how to avoid blatant operating room mistakes.

The Checklist

The 19 point surgical checklist was developed by the World Health Organization [WHO] and includes common sense, and inexpensive, measures like these two:

  • Prior to the patient being given anesthesia, make sure relevant anatomy is marked, and everyone knows if the patient has an allergy.
  • After surgery, check that all the needles, sponges and instruments are accounted for.
  • Before the checklist was introduced, 1.5 percent of patients in a comparison group died within 30 days of surgery at eight hospitals. Afterward, the rate dropped to 0.8 percent — a 47 percent decrease. Duh; as Homer Simpson might say! Not exactly rocket science; is it?

Skeptics Exist

However, Dr. Peter Pronovost – a Johns Hopkins University researcher in my hometown of Baltimore – led a highly influential checklist study a few years back on cutting infection rates from various intravenous tubes. He was a skeptic of this study because the researchers collected their own data and acknowledged the possibility that results were partly skewed because folks perform better when observed.

A Next-Gen Quality Proponent

I have been a fan of Atul since his medical school and surgical training days as a resident at Brigham and Women’s Hospital in Boston. I even cited him as a precocious young up-start in the preface of my book, Insurance and Risk Management Strategies for Physicians and Advisors. His own works, of course, are best-sellers: Complications: A Surgeon’s Notes on an Imperfect Science, and Better: A Surgeon’s Notes on Performance. In fact, I often posit that he is a leading example of next-gen quality gurus, following in the foot-steps of Robert Wachter MD before him, and John E. Wennberg MD, MPH of the Dartmouth Atlas, before Bob.

My Experiences

Yet, far too many medical quality issues are being blindly addressed with powerful information technology systems. But, do we really need RFID tags to ensure proper side surgery, or bar codes bracelets for newborns? For example, while a medical student from Temple University back in the late seventies, I was observing surgery during an orthopedic rotation and noted the wrong extremity had been prepped and draped, awaiting the surgeons’ incision. Luckily, my big mouth was an advantage at the time. Decades later, at birth, I helped deliver my own daughter and immediately splashed a (far-too-large) swatch of gentian-violet on her left heel as an identifier; cheap … effective … simple. It did horrify the youngish nursing staff, but not so the more mature PICU staff. These, and related issues, might be alleviated with some managerial common sense; along with a dose of mindset change.

Assessment

With the Obama administration about to spend massive amounts of money on eHRs and other sophisticated – but largely unproven and non inter-operable HIT systems – medical quality improvement measures; perhaps it’s time to take a breath, think and KISS! 

Most medical practices, clinics and hospitals ought not [should not] operate at full capacity, and maybe the best patient care is driven by demand (needs) – and not the supply driven (wants) of administrators, doctors, stockholders and private [physician owned] hospitals and/or other stakeholders. Still, financial advisors do-it, automobile mechanics do-it; so why don’t docs and hospitals do it… the checklist-thing?

Conclusion

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The Persistent Non-Diagnosis Dilemma

By Dr. David Edward Marcinko; MBA, CMP™dr-david-marcinko4

It is well known that computerized information systems [CIS] are increasingly being used to analyze the cost-effectiveness and quality of care given by medical providers. And, providers are slowly receiving clarity in the methods used to track their practice patterns, whether the tracking includes the cost of the practice, quality of care (such as frequency of preventive services that a practice provides), and/or outcomes monitoring.

Using information systems for such purposes is part of the growing field of medical informatics, which can be defined as the applied science at the junction of the disciplines of medicine, business, and information technology, which supports the healthcare delivery process and promotes measurable improvements in both quality of care and cost-effectiveness [Source: Medical College of Wisconsin, and www.HealthDictionarySeries.com].

Health Risk Assessment Data

Although HRA data are not generally used to profile care processes per se, such measures help to determine which members are at highest risk for chronic illness in the future, such as heart disease. And, according to our Business of Medical Practice print-book colleague – Brent A. Metfessel MD, MIS – patients usually fill out such surveys directly, as many Internet sites have sprung up which include free HRAs and calculation of risk scores. Included in HRA surveys are smoking history, dietary habits, general health questions, energy levels, emotional health, driving habits, and other parameters. Providers may use these results as guides to ascertain which members need the most intensive intervention and thus help prevent poor future outcomes http://www.springerpub.com/prod.aspx?prod_id=23759

None address the emerging problem of persistent non-diagnosis, however.

The Problem

Therefore, Bradley Kittredge of Hyoumanity suggests that a significant dilemma is emerging when addressing – or not addressing – HRA data relative to persistent non-diagnosis. In other words, the persistent non-diagnosis dilemma may represent a significant under-recognized and under-addressed emerging problem in our healthcare system today.

Not Iatric

This situation is unlike iatrogenic conditions which may be defined as those conditions that are physician induced [complications, “never-events”, allergic reactions, un-necessary treatments, interventions and/or surgery, etc]. More formally; iatros means physician in Greek, and-genic, meaning induced-by, is derived from the International Scientific Vocabulary [ISV]. Combined, of course, they become iatrogenic, meaning physician-induced. Iatrogenic disease is obviously, then, disease which is caused by a physician [www.iatrogenic.org].

The Definition

Blogger Kittredge – an MBA/MPH candidate for 2009 at the Haas School of Business at UC Berkeley and a Brian Maxwell Fellow – defines persistent non-diagnosis as:

“any patient who experiences clinical symptoms that five or more doctors are unable to diagnose.”

And, he opines that every day, thousands of Americans are desperately seeking answers to complex medical conditions that doctors are unable to diagnose.

Quality Improvement Initiatives

Findings ways to improve the process of diagnosis and the handling of these tough cases for both patients and doctors will reduce costs, improve health outcomes, and dramatically impact lives. It is the stuff of such medical quality improvement icons like Robert M. Wachter MD, Professor and Associate Chairman of the Department of Medicine at UCSF and my colleague and print-journal Foreword contributor David B. Nash; MD, MBA of the Jefferson Medical College in Philadelphia, PA www.HealthcareFinancials.com

Assessment

Currently, Brad is working to build an online tool to assist with complex and difficult diagnoses, which he considers among the biggest problems in medical care. His technical off-spring, Hyoumanity, is committed to improving awareness and understanding of the prevalence, causes, and implications of persistent non-diagnosis – and misdiagnosis – and to the development of tools to assist and empower patients and doctors to resolve complex cases [http://hyoumanity.blogspot.com]. We wish him well.

Conclusion

And so, 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 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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Hospital Revenue Cycle Management

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Augmentation thru Technology Adoption

[By Karen White PhD, and Staff ]

Several major hospitals, or healthcare systems, have filed bankruptcy this fiscal quarter. These include a two-hospital system in Honolulu; one in Pontiac, MI; Trinity Hospital in Erin, Tennessee; Century City Doctors Hospital in Beverly Hills, and four hospital system Hospital Partners of America, in Charlotte. 

And so, since cash flow is the life blood of any healthcare revenue cycle management initiative, it is important for physician executives and healthcare administrators to appreciate the impact of modern health information technology systems on this vital function.

Functional Area Targets

Technology plays a key role across all health entity revenue cycle operations. By functional area, the following are key targets:

Patient Access

This is the front-end of a hospital’s revenue cycle. It is made up of all the pre-registration, registration, scheduling, pre-admitting, and admitting functions. Enhancing revenue cycles in this area requires the following:

  • a call center environment with auto dialing, faxing, and Internet connectivity to quickly ensure and verify all pertinent information that is key to correct and timely payment for services rendered;
  • Master Person Index software to eliminate duplicate medical record numbers and assist with achieving of a unique identifier for all patients;
  • registration and admission software that scripts the admission process to assist employees in obtaining required elements and check that insurer-required referrals are documented;
  • denial management definition, including focus on how to obtain all the correct patient information up front while the patient is in-house; and
  • imaging of data up front.

Health Information Management

This is the middle process of a hospital revenue cycle and is often still referred to as “Medical Records.” This area is made up of chart processing, coding, transcription, correspondence, and chart completion. Better control of revenue cycles requires the following recommended technology:

  • chart-tracking software to eliminate manual outguides and decrease the number of lost charts;
  • encoding and grouping software to improve coding accuracy and speed and improve reimbursement;
  • auto printing and faxing capabilities;
  • Internet connectivity for release of information and related document management tasks; and,
  • electronic management of documents.

Patient Financial Services

This is the back-end process of a hospital revenue cycle. The operations include all business office functions of billing, collecting, and follow-up post-patient care. Recommended technology to optimize these functions includes the following:

  • 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.

Automation

Automation can lead to decreased paperwork, process standardization, increased productivity, and cleaner claims. In 2004, Hospital & Health Network’s “Most Wired Survey” found that the 100 most wired hospitals — including three out of the four AA+ hospitals in the country — had better control of expenses, higher productivity, and efficient utilization management. Today, these top hospitals tend to be larger and have better access to capital in these times of credit tightening.

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Assessment

The positive return on investment in technology increases allocation of funding to technology. This correlation is important because it begins to link the investment in information technology with positive financial returns in all areas of a hospital’s business, including the revenue cycle.

MORE: Rev Cycle Mgmnt

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SEC Rule 151-A and Insurance Agents

NAFA Criticizes the SEC

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Insurance agents without securities licenses won’t be able to sell index annuities under this new proposed rule.

NAFA Opines

The National Association of Fixed Annuities (NAFA) recently took a firm stand against the Security & Exchange Commission’s (SEC) proposed Rule 151A, which would regulate index annuities as securities rather than as insurance products.

Insurance-Securities Hybrid Product

NAFA said in a statement issued in July that it “strongly disagrees with the SEC proposal and will pursue all available avenues of recourse,” including taking legal recourse, if required.

Assessment

NAFA Says Nix SEC Rule 151A.

Conclusion

In other words, if Rule 151A is adopted, insurance agents without securities licenses would not be able to sell Index Annuities [IAs].  IAs are investment products that combine both fixed income investments and equity index options so as to be able to leverage opportunities in both.

Please comment and opine; especially insurance agents, investment advisors and financial planners.

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 Malpractice Liability Immunity

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Free Charity Medical Care?

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Sen. Mike Enzi [R-Wyoming], the senior Republican on the Senate Health, Education, Labor and Pensions Committee [HELP], recently introduced legislation that would allow physicians and other medical professionals to volunteer their services at charity clinics and community health centers free from medical liability concerns.

Query

What is your opinion on this idea, given that there are more than 42 million uninsured Americans, in need? Please comment and explain? We are especially interested in hearing from doctors, lawyers, actuaries and health economists.

Conclusion

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On Physician Peer Review

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New Era Risks

By Dr. David Edward Marcinko; MBA, CMP™

[Publisher-in-Chief]insurance-book

The Center for Peer Review Justice is a group of physicians, podiatrists, dentists and osteopaths who have witnessed the perversion of medical peer review by malice and bad faith.

Raison D’etre

Like the American Association of Neurological Surgeons [AANS], they have seen the statutory immunity, which is provided to “peers” for the purposes of quality assurance and credentialing, used as cover to allow those “peers” to ruin careers and reputations to further their own, usually monetary agenda of destroying the competition.

Cause and Goals

Therefore, the group is dedicated to the exposure, conviction, and sanction of doctors, and affiliated hospitals, HMOs, medical boards, and other such institutions, that would use peer review as a weapon to unfairly destroy other professionals.

Assessment

www.PeerReview.org is a rallying point and resource center for any medical professional that finds himself in the midst of an unfair and bad faith attack by unethical, malicious “peers”.

Conclusion

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Net Income [P&L] Statements

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Financial Statements [A Review for Physicians]

By Dr. David Edward Marcinko; MBA, CMP™

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The Net Income [Profit-and-Loss Statement] Statement [NIS] is only one of four financial statements. 

The four consolidated statements are: balance sheet, net-income, cash flow and retained earnings. 

The NIS reflects the following in a medical practice or healthcare business entity: 

  • Income from patient services, plus revenue from research grants, educational programs, gift and cafeteria sales, office space and parking lot rental, and investment income; and,
  • Expenses including general overhead, non-operating expenses like salaries and wages, fringe benefits, supplies, interest, professional fees, bad debts, depreciation, and amortization.  

Increases in working capital, current assets, the retirement of debt, and investment in new fixed assets are not considered in the Net Income Statement [NIS]. 

Assessment of Accounting Differences 

Definitional differences do occur, however, in the income statement. 

For example, the NIS may report physician compensation and benefits in the expense category, during a period of time.

Small physician practices, on the other hand, may report income and expenses on a “cash accounting” basis reflecting income actually received and expenses actually paid.  

The “accrual method” of accounting records expenses when they are incurred and income when earned, not when paid or received as in the cash method.

The cash method is easier, but the accrual method is more accurate and most healthcare entities use this method. Accrual accounting will increase going forward because of the nature of discounted contracts, capitated contracts, or other fixed reimbursement arrangements.  

Conclusion

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New Health Insurance Compliance Issues

Implications of US Patriot and Bank Secrecy Acts on Hospitals

By Dr. David E. Marcinko; MBA, CMP™

By Hope R. Hetico; RN, MHA, CMP™  dave-and-hope4

With the recent popularity and growth of personal health insurance plans (PHIPs), health savings accounts (HSAs) and / or medical savings accounts (MSAs), compliance with the USA PATRIOT Act has become an important issue for these new health insurance products.  

These insurance plans place financial services organizations into relationships with shared information institutions like hospitals, healthcare organizations, medical clinics and patient clients.

The Online Connection 

This happens because many, perhaps even the majority of health insurance plans are opened online as patients and insurance company clients use Internet search engines to find the “best” policy type to meet their needs.  

Appropriately, banks, healthcare entities, and hospitals are working with insurance companies, trust companies, banks and broker-dealers to offer identity-compliant and integrated insurance plan products. 

Verifications that these clients are who they say they are, is as paramount as monitoring their activity. 

Example:  

Section 314(b) of the US Patriot Act permits financial institutions and health insurance companies – upon providing notice to the United States Department of the Treasury – to share patient and related information with one another in order to identify and report to the federal government activities that may involve money laundering or terrorist activity.  

The US Patriot Act 

The US Patriot Act aims to partially accomplish this through three critical goals:  

  1. First, it gives investigators familiar tools to use against a new threat.
  2. Second, it breaks down a wall that has prevented information sharing between agencies.
  3. Third, it updates U.S. laws to respond to the current Internet environment.  

Bank Secrecy Act, PHIPs, MSAs and HSAs 

For additional compliance security, The USA Patriot Act also amended the Bank Secrecy Act [BSA] to give the federal government enhanced authority to identify, deter and punish money laundering and related terrorist financing activities.  

Assessment 

Whatever the financial outlays required for insurance/financial organizational compliance, it may result in very large savings later if affected hospital assets and patient health insurance information is safeguarded against attacks of virtual or real assets. 

Conclusion 

And so, what is your opinion on the above health law and policy? 

Institutional information: www.HealthcareFinancials.com 

Terminology: www.HealthDictionarySeries.com 

Related reference: Marc B. Royo and David B. Nash.Sarbanes-Oxley and Not-for-Profit Hospitals: Current Issues and Future Prospects.” American Journal of Medical Quality: Vol. 23, No. 1, 70-72, February 2008.

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Risk Retention Groups

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RRGs and Medical Malpractice Insurance Companies

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

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Definition

Risk Retention Groups are owner-controlled insurance companies authorized by the Federal Risk Retention Act of 1986.  An RRG provides liability Insurance to members who engage in similar or related business or activities for all or any portion of the exposures of group members, excluding first party coverage’s, such as property, workers’ compensation and personal lines.  Authorization under the federal statute allows a group to be chartered in one state, but able to engage in the business of insurance in all states, subject to certain specific and limited restrictions.  The Federal Act preempts state law in many significant ways.

RRG Advantages:

Medical RRGs

  • Avoidance of multiple state filing and licensing requirements;
  • Member control over risk and litigation management issues;
  • Establishment of stable market for coverage and rates;
  • Elimination of market residuals;
  • Exemption from countersignature laws for agents and brokers;
  • No expense for fronting fees;
  • Unbundling of services.

Of 130 new medical malpractice liability insurance companies that entered the market between 2002 and 2006, 65 percent were risk-retention groups, according to a study conducted for the National Risk Retention Association by the actuarial consulting company Milliman Inc.

Statistics from the Risk Retention Reporter, a journal that tracks the industry, showed that through September, 43 percent of the 23 risk-retention groups formed this year across various sectors are doctor-owned, while in 2001, no new physician risk-retention groups joined the market.

RRG Disadvantages

Some doctors and industry experts warn about drawbacks of risk-retention groups and question whether the physician-run companies – most of them relatively young – can survive future claims payouts and tough market cycles, while doctors do not have access to state guaranty funds to back up their coverage if a risk-retention group struggles financially or goes out of business. The Risk Retention Reporter noted that, anecdotally, physician self-insurance companies have failed at no greater rate than traditional carriers in recent years. 

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