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Cost Containment

Disability-Claim Judge Has Trouble Saying “No”

Americans seeking Social Security disability benefits will often appeal to one of 1,500 judges who help administer the program, where the odds of winning are slightly better than even. This article in the Wall Street Journal* explores the decisions of one particular judge in the system, David B. Daugherty, who maintains a slightly different record: In the fiscal year that ended in September, the administrative law judge, who sits in the impoverished intersection of West Virginia, Kentucky and Ohio, decided 1,284 cases and awarded benefits in all but four. For the first six months of fiscal 2011, Mr. Daugherty approved payments in every one of his 729 decisions, according to the Social Security Administration.

Mr. Daugherty has said every decision he makes “is fully supported by relevant medical reports and physical and/or mental residual functionary capacity assessments from treating or examining doctors or other medical professionals.”

For some, applying for benefits can be an agonizing process that takes more than two years. Benefits are modest—they can run around $1,000 a month—but come with access to government-run health plans Medicare and Medicaid. Analysts estimate the total package costs $300,000 over a beneficiary’s lifetime.

In a brief telephone interview in April, Mr. Daugherty blamed high poverty rates especially in Eastern Kentucky for his large case load and high approval rate.

“People would really be surprised at how little education those people have,” he said. “If they have a fourth-grade education, they couldn’t get a job if their lives depended on it.” Read more…*

*this link to the Wall Street Journal article will be good through 5/26/11.

Hospitals Overhaul ERs to Reduce Mistakes

Often chaotic and overcrowded, with scant data available about new patients, the emergency room is among the top hospital departments responsible for malpractice suits—and diagnostic errors account for 37% to 55% of cases in studies of closed claims.

The average payments and legal expenses for ER cases have more than doubled over the past two decades, according to the Physician Insurers Association of America, a nonprofit trade association whose members cover about 60% of emergency physicians.  This Wall Street Journal article explores pilot programs in different hospitals across the United States working to make corrective changes in emergency room procedures.

Changes include adopting new triage systems to ensure doctors and nurses jointly see at-risk patients soon after they arrive, requiring physicians and nurses to huddle to make sure no information is overlooked, and using time-outs at discharge to prevent patients with unresolved problems from leaving the ER.

Some interesting points to note, emphasizing the impact emergency room care and costs have upon health care in the United States:

  • Insurance broker Aon Corp. estimates malpractice suits arising from emergency-room incidents in 2009 alone will cost hospitals $1 billion.
  • While emergency-room errors often happen because a doctor misjudges symptoms, in almost all cases of missed or delayed diagnoses essential pieces of information weren’t available at the time the doctor made a decision, according to Dana Siegal, program director of risk-management services for Crico/RMF Strategies, whose parent company insures hospitals affiliated with Harvard University. Crico/RMF is working with 16 hospitals on a project to improve communication between doctors and nurses. Mannequins will be used to simulate various emergencies, and participants discuss what could have been done differently.
  • The changes to emergency-room systems come as ERs face a growing work load. In a survey released last month, the American College of Emergency Physicians said 80% of its members are reporting increased visits to emergency rooms and more than 90% expect increases next year.
  • David Seaberg, president-elect of the group, says a growing shortage of primary-care physicians is driving many patients to the ER.

Read more…

Rethinking Medicare Overhaul

House Republicans signaled Thursday that they were backing away from the centerpiece of their budget plan — a proposal to overhaul Medicare — in a decision that underscored both the difficulties and political perils of addressing the nation’s long-term fiscal problems, per this New York Times article.

While top Republicans insisted that they remained committed to the Medicare initiative, which had become the target of intense attacks by Democrats and liberal groups in recent weeks, the lawmaker who would have to turn the proposal into legislation said he had no plans to do so any time soon.

Republicans suggested that they would continue to press to rein in the growing costs of Medicare, even if not through the current proposal, which would transform the program into one in which the federal government subsidized the purchase of private health insurance coverage by Americans 65 and older.

Given the parties’ differences and the short time frame for negotiations before Congress must increase the debt limit, both sides have indicated that any compromise is likely to be based less on specific policy changes than on proposals setting deficit-reduction targets for coming years. Those targets would be combined with triggers to make automatic cuts in spending — and tax increases, in Democrats’ view — if the targets are exceeded. Read more…

In Florida, HMOs Would Treat Medicaid Patients

As explored in this New York Times article, a crucial experiment in the future of Medicaid is playing out in Florida, where both houses of the Legislature are vying to find ways to drastically cut costs, manage care and reduce waste and fraud.

The cuts and changes being sought by the Republican-led Legislature and encouraged by the new Republican governor, Rick Scott, a wealthy former hospital company executive, are deeper than those in many other states.

In the past 11 years, the cost of Medicaid in Florida has grown to $21 billion from $9 billion and amounts to a third of the state budget. The federal government pays more than half the tab.

Relying loosely on a five-year-old pilot program to shift care to HMOs, Florida lawmakers are poised to scrap the traditional model in which the state pays doctors for each service they perform. Instead, almost all of Florida’s Medicaid recipients would be funneled into state-authorized, for-profit HMOs or networks run by hospitals or doctors. HMOs or networks would also manage the long-term care of the elderly, shifting them away from nursing homes and leading to an expansion of in-home care. Lawmakers who support the bill say the state needs this flexibility in curtailing the exploding cost of Medicaid. Read more…

As Health Costs Soar, G.O.P. and Insurers Differ on Cause

As Congress continues to debate the new health care law, health insurance costs are still rising, particularly for small businesses, as noted in this New York Times article. As Congress continues to debate the new health care law, health insurance costs are still rising, particularly for small businesses. Republicans are seizing on the trend as evidence that the new law includes expensive features that are driving up premiums. But the insurance industry says premiums are rising primarily because of the underlying cost of care and a growing demand for it.

As an example:

  • In New Hampshire, more than 90 percent of private employers have fewer than 50 employees.
  • This year, groups of more than 20 workers have been experiencing premium increases of around 20 percent.
  • Smaller groups are seeing increases of 40 percent to 60 percent or more.

Some insurance industry lobbyists say the new federal health care law is driving up premiums. But Vincent Capozzi, senior vice president for sales and customer service at Harvard Pilgrim, said that:

  • Only one percentage point of the increases here was attributable to the federal law, mainly its requirement for free coverage of preventive services.
  • Another percentage point results from new state laws requiring coverage of hearing aids and certain treatments for autism, Mr. Capozzi said.

Most of the remainder, he said, reflects increases in the use and cost of medical care by small-group customers, with adjustments for demographic characteristics like age. Read more…

Hospitals With Robots Do More Prostate Cancer Surgery

Hospitals that buy surgical robots end up performing more prostate cancer operations, suggesting that technology has become a driving force behind decisions about men’s cancer care, new research shows.

The study, published in the journal Medical Care and explored in the New York Times, is the latest report to suggest that how men are treated for prostate cancer appears to be influenced by a variety of factors, including the technology and marketing goals of hospitals and doctors, rather than scientific evidence on benefits and risks.

The new study, conducted by researchers at New York University and other institutions, was a fairly large one, tracking surgical robot purchases at 554 hospitals, along with the treatment given to more than 30,000 men given a prostate cancer diagnosis from 2001 to 2005.

Interesting notes:

  • Buying a robot led to an average increase of 29 operations a year per hospital.
  • Hospitals that own a surgical robot may be that the technology helps a hospital lure potential surgical patients away from the competition.
  • The data also suggest that once a hospital obtains a robot, patients who might be candidates for non-surgical options are more likely to be steered toward robotic surgery instead.
  • A surgical robot used for prostate cancer costs $1 million to $2.25 million, according to the N.Y.U. study. In addition, hospitals spend $140,000 annually for a service contract and $1,500 to $2,000 per patient on disposable instruments.

The researchers found that treatment patterns varied markedly across the clinical sites studied, and those differences could not be explained by measurable factors like severity of disease or patient age. Read more…

Fight Over a Fix for Florida “Pill Mills”

Per this Wall Street Journal article, Florida Gov. Rick Scott’s call to cancel a state drug-monitoring program has sparked an uproar in Appalachian states that say they are deluged with illegally bought pills from South Florida pain clinics.

Supporters of the program, which has yet to start operating, say it would help combat Florida’s “pill mills”—shady storefront operations that provide a bounty of prescription drugs, such as oxycodone and hydrodone, for addicts and traffickers. The tracking system would include a centralized database to help identify buyers who are accumulating large numbers of pills and the doctors who are over-prescribing them.

Florida, like most states, is facing a large budget deficit—in their case, to the tune of $3.6 billion. When the bill which established the drug-monitoring program was passed in 2009, the state envisioned that the program would be funded through federal monies. This hasn’t been the case, but given the size of the problem and its effect on neighboring states, the “pill mill” situation in Florida is of pressing concern to many throughout the region.

Pill mills have flourished in Florida, especially in Broward County, in recent years. Weak standards governing who can set them up, a lack of oversight by state agencies and the absence of a prescription-monitoring program have contributed to the problem, said Sherry Green, chief executive of the nonprofit National Alliance for Model State Drug Laws.

According to the Florida attorney general’s office, clinics are often cash-only enterprises employing doctors who write prescriptions for painkillers without examining patients.

They have proved to be a magnet for buyers in the Southeast. According to Frank Rapier, director of the Appalachia High Intensity Drug Trafficking Area, highway patrol officers in hot spots like eastern Tennessee routinely stop vanloads of people returning from Florida with fresh stockpiles of prescription drugs.

In West Virginia, state Sen. Evan Jenkins said flights on discount airlines between Huntington, W. Va., and Fort Lauderdale, Fla., have been dubbed the “Oxycontin Express.”

States in the region have been cracking down. Kentucky created one of the first prescription-monitoring programs in the country in 1999. The system has helped stamp out the sort of storefront businesses seen in Broward County, according to Keith Humphreys, a Stanford University researcher who has studied the programs. In all, 34 states have implemented them. Read more…

Spine Surgery, Medical Advances, and an Aging Population

A condition known as spinal stenosis is one of the top reasons older Americans seek surgery for lower back pain, and the number of people afflicted with the disorder is expected to grow as the population ages. A recent study in the Journal of the American Medical Association (JAMA), as detailed in this Wall Street Journal article, looked at the situation.

Some orthopedic doctors are concerned the procedure has gotten more complicated than it needs to be as some surgeons combine traditional stenosis therapy with other procedures that fuse vertebrae. The more complex surgery can be beneficial for some patients, especially those with more than one spinal disorder. But it also raises the cost of treatment and increases the chances of complications, including stroke and death, recent research shows:

  • The number of complex spinal surgeries has grown at a rapid rate:, now accounting for 19.9 per 100,000 surgeries from 1.3 per 100,000.
  • Although patients suffering only stenosis and not other spinal conditions were less likely to receive the combined procedures, these patients still accounted for as many as 50% of the complex surgeries.
  • The higher rate of complex procedures increased hospital costs for surgery by 40%.
  • The complication rate of those cases also was higher at 5.6% compared to 2.3% for the simpler, decompression surgery.
  • Hospitals stays were on average two days longer for complex surgery.
  • Average per-patient hospital charges were $80,888, compared with $23,724 for the simpler surgery.

Why the rate of increase? An aging population is inherently going to mean an increase in the number of spine surgeries in general, as vertebra naturally degenerate over time. However, the rate of increase currently happening is far greater than that transition would call for.

“Many factors are at play, but I think the finances play an important part,” says Richard Deyo, a professor of evidence-based medicine at Oregon Health & Science University in Portland, Ore., and lead author of the JAMA study. “There are some prominent surgeons who have strong financial connections to device manufacturers.”

Christopher Bono, an orthopedic surgeon at Brigham and Women’s Hospital in Boston, says the JAMA article doesn’t explain why the surgery numbers are increasing other than “insinuating that it is because of marketing and surgeon greed.” He says there could be other reasons for the increase “such as better corrections of deformities.”

“It has not been shown that the more complex surgery is better [for patients with simple stenosis], but people are willing to have it done,” says Eugene J. Caragee, an orthopedic surgeon at Stanford University School of Medicine, who has written on the topic in medical journals. “The marketing is relentless,” he says. Read more…

Excessive weight of U.S. population costs $270 billion annually

People who are overweight or obese are costing the country $270 billion annually in increased medical costs and high rates of disability and mortality, according to the latest estimates.

The study, released Jan. 10 by the Society of Actuaries, analyzed increased medical costs and loss of economic productivity resulting from excess mortality and disability. Researchers found that obesity cost the U.S. economy $198 billion in 2009, and excess medical costs of the overweight population were $72 billion.

“There is substantial evidence that overweight and obesity are becoming worldwide epidemics and are having negative impacts on health and mortality,” said study co-author Donald Behan, PhD, an independent consulting actuary.

An overweight person is defined as having a body mass index of 25 to 29.9, and an obese person has a body mass index of 30 or more.

Discovering the new normal: It’s not just “small talk” when it comes to assessing life quality

Per this New York Times article, when physicians fail to ask probing questions about quality of life, addressing only the physical aspects of a chronic illness, they are likely to miss serious problems that can be remedied — among them depression, sleep disruption, loss of sexual desire and difficulty with everyday or pleasurable activities.

Of course, everyone knows that a doctor’s time these days is limited. But for medical care to be delivered efficiently and economically, assessing health-related quality of life is an essential element that can help doctors identify therapy that is counterproductive or ineffective or needs to be modified.

As Dr. Gordon H. Guyatt of McMaster University in Hamilton, Ontario, put it in an article in the Mayo Clinic Proceedings,  “If the primary goal of therapy is to improve the way patients feel,” assessing quality of life when making clinical decisions is essential. And it is the patient, not the physician, who obviously defines “quality of life” for themselves.

Identifying a disease’s effects on patients’ quality of life can result in treatments and self-management techniques that may enable them to reclaim their former lives. Arthritis patients, for example, might try to be more physically active and better control their weight. Or, as Dr. Rainer, author of Arthritis Self-Management put it, “Quality of life depends on how well you can integrate new circumstances into your life.”