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The High Costs of Ill-Considered Cost-Cutting

March 11, 2014
4:51 pm

If I had the ability to make anything required reading for the powers that be in Washington, D.C., it would be Dr. Marc Grodman’s blog post on The Hill’s website.  Dr. Grodman is CEO of Bio-Reference Laboratories, Inc., a New Jersey-based clinical lab and is also a member of the Healthcare Leadership Council.   In his post, he explains clearly and compellingly that simply cutting healthcare spending is not inherently synonymous with achieving a more cost-effective healthcare system.

Dr. Grodman uses the Medicare reimbursement cuts faced by clinical laboratories as his example, pointing out that simply chopping away at Medicare payments for lab services will undermine the advancements laboratories have made in developing genetic testing “that precisely identify disease, (enabling doctors) to select the best treatment for each patient,” speeding the healing process and reducing overall healthcare costs.

If reimbursement cuts hamper this progress, he writes, physicians must rely more on trial and error, leading to greater redundancy, higher cost and reduced quality.

This is true for clinical labs, but it speaks to a larger issue surrounding healthcare policymaking.  Even though per-capita Medicare spending is at historic lows, many on Capitol Hill insist there’s a healthcare spending problem.  In part, they are right because the aging of the baby boom population and the rapid growth in new Medicare beneficiaries will lead to a rise in utilization of healthcare services.  We can’t address this rapid growth in patient numbers and demands, however, by enacting healthcare budget cuts that have no correlation with healthcare value.

As Dr. Grodman writes, “We have yet to establish the balance between managing the cost to provide and access healthcare with maintaining the ability for development at all levels of the care spectrum.”

Finding that balance is imperative if we’re to meet the daunting healthcare challenges that are inevitable and that can’t be addressed without health innovation.

The Supreme Court and the Importance of Information

April 04, 2011
1:58 pm

Last week, my organization, the Healthcare Leadership Council, joined with two distinguished healthcare leaders, Dr. Louis W. Sullivan and Tommy Thompson, both former secretaries of the Department of Health and Human Services, in filing a ‘friend of the court’ brief with the U.S. Supreme Court.  We did so because of the critical nature of medical information and the importance of keeping databases accurate, up-to-date and accessible to medical professionals.

The case in question is Sorrell v. IMS Health and it concerns a Vermont law that bans the commercial use of de-identified patient data that is part of a physician’s prescribing history.  It’s the kind of law that plays to the kneejerk instinct to keep patient information in a sealed and inaccessible lockbox, but the ramifications of this approach to quality healthcare are quite severe.

What’s important to note here is that the Vermont law really isn’t protecting anybody.  The patient data in question is already de-identified.  Anyone making use of this information won’t see patient names.  Furthermore, there are already rigorous federal and state regulations in effect to protect against wrongful use of medical information.

The downside of the Vermont law is that barring all commercial use of such data also stops the flow of resources that is used to maintain current, accurate databases and to create new analytical tools that enable the use of data for health system improvements.

Secretaries Sullivan and Thompson and the HLC are far from alone in holding this point of view.  Over 50 organizations and individuals, including the U.S. Chamber of Commerce and the Associated Press, have also filed amicus briefs to invalidate Vermont’s statute.

Liability Reform Prognosis Improving

January 28, 2011
10:23 am

obama-sotu-getty-1-25-11-slideMedical liability reform is one of those causes that, up to now, has seemed a political impossibility at the federal level.  Even in years when Republicans controlled both the U.S. Senate and House, tort reform advocates couldn’t muster sufficient votes to get legislation passed.  A number of states have enacted reform measures, but Congress – encouraged by strong lobbying from the nation’s trial attorneys – has stubbornly refused to rein in even the most meritless lawsuits.

Now, though, we’re seeing a number of actions taking place that indicate there may be an opening to get something done on liability reform.  Among them:

•      President Obama made it a point to mention medical liability reform in his State of the Union speech.

•     The President’s deficit reduction commission has cited comprehensive liability reform as a recommended action to contain healthcare costs.

•      Medical liability reform legislation has just been introduced in the House of Representatives, and it has bipartisan sponsorship.

•     There is increasing interest in innovative measures such as tying liability protections to usage of health information technology and evidence-based medicine.

There are compelling reasons for Congress to move on this issue.  We have to be concerned about having a sufficient supply of physicians to serve an insured patient population that will increase as a result of health reform.  In many states, the liability climate forces physicians into early retirement.  We’re concerned about making our healthcare system more cost efficient, and yet the current liability system forces the expenditure of dollars in ways that don’t benefit patients.  President Obama’s right.  It’s time to make progress on this issue.

“Quality, Safe Healthcare and a Passion for Excellence….”

January 10, 2011
4:43 pm

Even before Congress passed the Affordable Care Act, the actual process of reforming our healthcare system was already taking place at locales throughout the country.  In all sectors of American healthcare, we’re seeing innovators who are developing new and better ways of delivering high-quality, cost-effective care to patients.

The publication SmartBusiness spotlighted one of these innovators, Barry Arbuckle, Ph.D., the president and CEO of the MemorialCare Health System in southern California.  In an interview, Dr. Arbuckle discussed how physicians in the MemorialCare system are practicing evidence-based medicine that is bringing about patient outcomes that “frequently exceed state and national averages for most diseases.”

In the interview, Dr. Arbuckle, a member of the Healthcare Leadership Council, also discussed the critical role of electronic patient records and offers advice for employers on the questions they need to ask to ensure the best possible healthcare for their employees.

The theme of best practice, evidence-based medicine is one we’re going to hear about frequently as the nation’s healthcare system continues to transform itself.

HLC President on Meaningful Use Regulations

July 13, 2010
3:57 pm

An organization of health industry chief executives today applauded federal regulators for being responsive to the concerns of hospitals and physicians in constructing the final “meaningful use” regulations that will determine the allocation of health information technology (HIT) incentive funds.  But, said the president of the Healthcare Leadership Council (HLC), the newly-released rules leave some critical issues still unaddressed.

HLC president Mary R. Grealy said that, even though her organization was still analyzing the regulations, “it’s clear that federal regulators paid close attention to the more than 2,000 comments they received on the proposed rule, and that they have been responsive to concerns that the initial regulations placed the “meaningful use” bar so unrealistically high that the health technology revolution would have been slowed instead of accelerated.”

The “meaningful use” regulations establish standards that health providers must meet in order to qualify for a share of the more than $27 billion authorized by Congress in last year’s economic stimulus legislation.

The Healthcare Leadership Council is a coalition of chief executives from all sectors of American healthcare.

Ms. Grealy said, “An example of this responsiveness is seen in the fact that the rules no longer require that, in the initial stage of implementation, all of a health provider’s administrative transactions must be included in an electronic health record.  That simply wasn’t realistic.  Those requirements are now in Phase 2 of implementation, which is achievable.”

She said, though, that legitimate concerns remain.  For example, the regulations should consider each campus of a multi-campus hospital system as a separate entity in qualifying for HIT incentive payments.  And, she said, health providers who have built and succeeded with their own information technology systems should be grandfathered into the universe of successful “meaningful use” qualifiers, but that doesn’t appear to be the case based on an initial review of the rules released today.

Nonetheless, Ms. Grealy said, “we’re seeing important progress with these regulations.  Clearly, the administration saw there was a gap between the theoretical standards they initially wanted to apply and the real-world challenges that physicians and hospitals face in achieving HIT advancement.   We all want the benefits that come from information technology – enhanced patient safety, more cost-efficient operations, greater use of evidence-based medicine – but to make strides forward, regulators and providers need to be moving at a coordinated pace.”