October 2006

Medicare Hospitalization Deaths Decline, as Gap Grows Between Best, Worst Hospitals

Medicare Hospitalization Deaths Decline, as Gap Grows Between Best, Worst Hospitals

A typical hospital patient on Medicare has a 69 percent lower chance of dying at the top-rated U.S. hospitals than at its lowest-rated ones, and the quality chasm between 1-star and 5-star hospitals has grown by about 5 percent since 2005, according to a study issued Oct. 16 by HealthGrades Inc.

Since 2003, the risk-adjusted mortality rates of hospitalized Medicare patients have steadily declined, 8 percent on average. But the degree of improvement varied widely by procedure and diagnosis studied, the study found. However, the study found considerable variation in quality among hospitals studied and a worsening of mortality risk at some.

In fact, the differences in patient outcomes between hospitals rated by HealthGrades as "5-star" and "1-star" remains large and is getting larger.

"This underscores that hospitals are in fact not the same and thus, the value and importance of this information being readily available to prospective patients when making decisions about where to get their medical treatments," the study said.

The Ninth Annual HealthGrades Hospital Quality in America Study examined records from 40.6 million Medicare hospitalizations from the years 2003 through 2005 to rate the quality of care at more than 5,00 nonfederal hospitals.

Measuring Improvements

Five-star U.S. hospitals had significantly lower risk-adjusted mortality rates across all three years studied, and improved 19 percent more than the nationwide hospital average. In addition, 5-star hospitals improved 57 percent more than 1-star rated hospitals.

According to the study, more than 300,000 Medicare lives could have been saved during 2003 through 2005 if all hospitals performed at the level of hospitals rated with 5 stars across all 18 procedures and diagnoses studied. In fact, 50 percent of the potentially preventable deaths were associated with just four diagnoses: heart failure, community-acquired pneumonia, sepsis, and respiratory failure.

Health Grades Inc. is a health care ratings, information, and advisory services company based in Golden, Colo.

The study is available at http://www.healthgrades.com/media/dms/pdf/HealthGradesNinthAnnualHospitalQualityinAmericaStudy.pdf.

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IOM Says Medicare Should Use P4P Plan to Improve Quality of Health Care Service

Medicare's provider reimbursement system provides few incentives to improve the quality of care delivered to its 42 million beneficiaries and so should be scrapped in favor of a pay- for- performance (P4P) system, the Institute of Medicine (IOM) said.

IOM recommended Medicare phase in performance-based payment systems for its providers over three to five years. Some health care providers such as hospitals, home health agencies, and Medicare managed care plans could transition to P4P immediately, the report said.

More time may be needed for other, small providers, such as physician offices, although P4P could begin for this group immediately if it were voluntary, according to the report, Rewarding Provider Performance: Aligning Incentives in Medicare.

CMS already is nudging Medicare toward adopting P4P reimbursement through financial incentives to hospitals and physicians. Congress is considering expanding those programs.

IOM said P4P in Medicare should be done "largely" with existing funding, although new money may be needed initially to create adequate financial incentives for improvement. Savings from P4P also could be used to fund new programs, it added.

The report recommended Congress create provider-specific pools from reductions in the Medicare payment base rate, ensuring the pools are large enough to motivate providers to improve the quality of care they deliver.

For example, IOM said models reducing payments by 2 percent for three clinical conditions produced physician rewards averaging $88 per doctor. The report did not recommend how big provider bonuses should be, saying that should be left to lawmakers to determine.

IOM also recommended Congress give the Department of Health and Human Services authority to combine payment pools for different care settings into one pool from which all providers would be rewarded. HHS initially should reward health care that is of high clinical quality, patient-centered, and efficient.

The report said two performance benchmarks should be used when distributing P4P awards: improvement in meeting quality standards and excellence in meeting or exceeding those standards. Awards allocated for improvement should be phased out over time, leaving rewards only for high performance, it added.

Public Reporting

IOM also called for public reporting and transparency of provider quality, saying providers initially should be given financial incentives for publicly reporting such data.

IOM said quality measures initially may have to be narrow to encourage provider participation. Three years from now HHS should determine whether progress toward universal participation in quality reporting had been made or whether mandating provider participation may be called for, the report said.

Medicare should design P4P programs to reward improved coordination of care across providers and across health care settings, IOM said. The program also should explore options for getting health care information technology to providers to strengthen the use of performance measures, it added.

Finally, IOM said HHS should implement a monitoring and evaluation system to: assess early experiences with P4P, so any necessary corrective action could be taken; evaluate the impact of P4P on clinical quality, patient-centeredness and efficiency; and identify the best practices of high-performing delivery settings that could be shared by providers.

Provider groups generally praised the IOM report, saying the recommendations, if implemented, could transform the health care program. But some expressed concern that P4P not be used as cover to reduce Medicare provider spending.

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Pay for Performance Still Faces Slow Going

Early experiments in pay-for-performance and other quality- and incentive-based healthcare reimbursement systems have been promising, but the concept will never reach its full potential to transform care until more physicians have access to advanced health-IT, say several program leaders.

"Pay for performance is never going to achieve the value we want unless it's linked tightly with health-IT. Period. It's just not going to happen," said Carolyn Clancy, M.D., director of the federal Agency for Healthcare Research and Quality (AHRQ), speaking at a P4P symposium in Washington recently.

Clancy said the recent presidential order calling for increased transparency in healthcare pricing and quality and new regulations to ease restrictions on hospitals providing technology to physicians are "lowering the risk of investment" for physicians. Clancy also said her agency is involved in or aware of more than 100 pay-for-performance projects, encompassing as many as 53 million Americans—a number she expects to grow to 85 million by 2008.

However, with electronic medical records (EMRs) in just 15 percent to 20 percent of physician practices — and many EMRs lacking reporting tools — collecting quality data has been a challenge, Clancy said. The AHRQ director insists that only a single set of standards and a single set of performance measures for a given medical condition will help technology developers add real-time feedback to practitioners to facilitate clinical decision support and unleash the true power of the EMR.

The hard part, according to Clancy, is to develop a model of shared accountability that is fair to patients, clinicians, and payers alike. "We've got to have guidelines that are written from the ground up in ways they can actually be incorporated into clinical decision support," Clancy said. Furthermore, Clancy added, evidence must be relevant to the individual patient at the point of care.

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High Cost, Staff Disruption Cited as Barriers to Providers' Use of E-Health

The high cost of implementation and possible disruptions in staff productivity are preventing health care providers from adopting electronic medical records (EMR), according to a study released Oct. 11 that found as few as 10 percent of physicians and 5 percent of hospitals using EMR in 2005.

The study said "formidable barriers" are hampering health IT adoption, including the initial high cost of investing in IT systems and their ongoing maintenance; the short-term loss of staff productivity as workers adapt to using new systems; possible legal hurdles, such as federal anti-fraud and abuse laws that may be triggered when a large institution provides IT systems to a smaller one; and the lack of integration in many health systems.

The report also asserted that insurers and other payers for health care, rather than doctors and other providers, would see most of the savings from providers' information technology enhancements.

The study, a joint project of the Robert Wood Johnson Foundation and the federal government's Office of the National Coordinator for Health Information Technology, also found that a standard definition of health IT and methods for measuring its implementation are lacking, making it difficult to track how much IT has infiltrated the medical profession.

IT adoption could be better measured if terminology and survey methods were standardized, the report said.

The report said these barriers must be overcome to meet President Bush's deadline for a nationwide, interoperable health information network and secure, personal electronic health records for most Americans by 2014.

Minimum Measures

The report is a synthesis of numerous studies and surveys about health IT implementation and use. It said that while about a quarter of physicians have been found to use some sort of electronic health record, only about 10 percent of doctors are using systems that make a difference in patient care.

That includes systems that collect patient information, displays test results, allows providers to enter medical orders and prescriptions, and allows physicians to make treatment decisions, the report stated. At a minimum, these are the measures that should be use to define a fully operational EHR, it added.

The report said financial barriers have a significant influence on IT adoption. This includes the high cost of implementing systems as well as the uncertainty regarding the value of doing so. The report said many providers do not see a business case for IT adoption, particularly since insurers do not reward efficient delivery of care.

Economic Benefits

"Making matters worse, the purchasers of HIT--mostly doctors and hospitals--would capture only a small fraction of HIT's potential economic benefits," the report said. "It has been estimated that as much as 80 percent of the potential savings generated through HIT inure to insurers and health care group purchasers, including the federal government, in the form of lower premiums and enhanced worker productivity."

Providing financial incentives for HIT adoption would not necessarily spur its adoption, because other issues such as standardization and interoperability must first be resolved, according to the report.

Providers also are concerned that IT systems they adopt could quickly become obsolete as technology advanced, the report said.

Among the legal barriers that the providers face is the concern that providers could violate federal anti-fraud laws by distributing health IT, and the report said providers are concerned about the possible legal burden of compliance under HIPAA.

Providers also are concerned about legal exposure associated with disclosure of patient information, the report added.

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Privacy Crucial to E-Health Interoperability, Not Enemy of Standards

Privacy protections must be integrated with the development of an interoperable electronic health network, Janlori Goldman, director of the Health Privacy Project, said Sept. 25.

Addressing attendees and fellow panelists at the Thirteenth Annual HIPAA Conference, Goldman said too often, privacy protections under the administrative simplification provisions of HIPAA have been looked at as obstacles to achieving interoperability of health care records.

Goldman criticized the enforcement philosophy of the Department of Health and Human Services to urge covered entities--providers, insurers/payers, and clearinghouses--to comply voluntarily with standards, and the department's reluctance to fine offenders.

"If you enforce the rules and fine people, then people will take it seriously," Goldman said.

However, panelist Stanley Nachimson of CMS’ Office of HIPAA Standards, said, "We made a conscious choice to be complaint-driven. We made a conscious choice to move toward a corrective action and that we would not immediately fine" a noncompliant covered entity.

Privacy Crucial

Ensuring the privacy of protected health information is crucial to the success of HIPAA transaction and code sets, security, and provider identifier rules, as well as an interoperable electronic health care record system, Goldman said.

Without this protection, patients are going to continue to be leery of electronic records and reluctant to participate, she said. A recent survey showed that 50 percent of people believe that protected health information is more secure on paper than in electronic form, she said.

"Fear overwhelms any benefit people may be getting," said Goldman, a research scholar at the Center on Medicine as a Profession, Columbia College of Physicians & Surgeons, New York. "We need the federal government to take the lead, not just to leave it up to the market."

Panel member Jodi G. Daniel, director of the office of policy and research, Office of the National Coordinator for Health Information Technology at HHS, agreed that privacy and security are critical and should be "thought of in tandem with technical and architectural standards" of interoperable electronic health care records. "We strongly believe that an electronic system provides greater protection than a paper-based system."

In describing the goal of an interoperable system, HHS Secretary Mike Leavitt in August compared it to automatic teller machines or credit cards. In other words, "you can use it anywhere in the world and it works, because it's interoperable," Leavitt said. "Everybody competes but uses the same system, basically, to transact their affairs."

Lessons of HIPAA

Panel Chairman William R. Braithwaite, chief medical officer of the eHealth Initiative and Foundation, said experiences with HIPAA rule compliance offer lessons for the Bush administration's push for health information technology.

Braithwaite said the experience with the HIPAA administrative simplification regulations teaches that:

Adoption and maintenance of a new way Privacy protections must be integrated with the development of an interoperable electronic health network, Janlori Goldman, director of the Health Privacy Project, said Sept. 25.

Addressing attendees and fellow panelists at the Thirteenth Annual HIPAA Conference, Goldman said too often, privacy protections under the administrative simplification provisions of HIPAA have been looked at as obstacles to achieving interoperability of health care records.

Goldman criticized the enforcement philosophy of the Department of Health and Human Services to urge covered entities--providers, insurers/payers, and clearinghouses--to comply voluntarily with standards, and the department's reluctance to fine offenders.

"If you enforce the rules and fine people, then people will take it seriously," Goldman said.

However, panelist Stanley Nachimson of CMS’ Office of HIPAA Standards, said, "We made a conscious choice to be complaint-driven. We made a conscious choice to move toward a corrective action and that we would not immediately fine" a noncompliant covered entity.

Privacy Crucial

Ensuring the privacy of protected health information is crucial to the success of HIPAA transaction and code sets, security, and provider identifier rules, as well as an interoperable electronic health care record system, Goldman said.

Without this protection, patients are going to continue to be leery of electronic records and reluctant to participate, she said. A recent survey showed that 50 percent of people believe that protected health information is more secure on paper than in electronic form, she said.

"Fear overwhelms any benefit people may be getting," said Goldman, a research scholar at the Center on Medicine as a Profession, Columbia College of Physicians & Surgeons, New York. "We need the federal government to take the lead, not just to leave it up to the market."

Panel member Jodi G. Daniel, director of the office of policy and research, Office of the National Coordinator for Health Information Technology at HHS, agreed that privacy and security are critical and should be "thought of in tandem with technical and architectural standards" of interoperable electronic health care records. "We strongly believe that an electronic system provides greater protection than a paper-based system."

In describing the goal of an interoperable system, HHS Secretary Mike Leavitt in August compared it to automatic teller machines or credit cards. In other words, "you can use it anywhere in the world and it works, because it's interoperable," Leavitt said. "Everybody competes but uses the same system, basically, to transact their affairs."

Lessons of HIPAA

Panel Chairman William R. Braithwaite, chief medical officer of the eHealth Initiative and Foundation, said experiences with HIPAA rule compliance offer lessons for the Bush administration's push for health information technology.

Braithwaite said the experience with the HIPAA administrative simplification regulations teaches that:

Adoption and maintenance of a new way of managing, recording, and transmitting health information takes too long;

Compliance is slow and spotty, even when required by federal law; and

Even if it will save a lot of money, health care industry participants will not change rapidly.

Braithwaite agreed with Goldman that uncertainty and lack of trust are the biggest barriers to efficient health information exchange (HIE). He postulated that privacy rules might change to make them more consistent across states.

"The trend is to increase patient control over information disclosure, but it will require new technology and processes," Braithwaite said. "Standards must become more specific. Interoperability requires tighter specifications and funding may be required. Conformist testing must become part of acceptance. Explicit guidance and consistent enforcement can also reduce uncertainty."

CMS's Nachimson said the health care industry will have to be convinced that interoperability is in their best interest. However, he added, "I don't think we've made the case for standardization."

More information is available at http://www.hipaasummit.com/.

of managing, recording, and transmitting health information takes too long;

Compliance is slow and spotty, even when required by federal law; and

Even if it will save a lot of money, health care industry participants will not change rapidly.

Braithwaite agreed with Goldman that uncertainty and lack of trust are the biggest barriers to efficient health information exchange (HIE). He postulated that privacy rules might change to make them more consistent across states.

"The trend is to increase patient control over information disclosure, but it will require new technology and processes," Braithwaite said. "Standards must become more specific. Interoperability requires tighter specifications and funding may be required. Conformist testing must become part of acceptance. Explicit guidance and consistent enforcement can also reduce uncertainty."

CMS's Nachimson said the health care industry will have to be convinced that interoperability is in their best interest. However, he added, "I don't think we've made the case for standardization."

More information is available at http://www.hipaasummit.com/.

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