CDHPs and HSAs: Some spend more and some spend less

Health Affairs published yesterday (see the Health Affairs blog post) a RAND meta-analysis with an unsurprising conclusion: some folks with high-deductible consumer-directed health plans (usually paired with health savings accounts, or HSAs) use less care, and some use more.  There are those who are affected more by the out-of-pocket expenses, and may defer care.  There are those who can more easily afford care (and are often the healthiest cohort).  That population is best served by the combination of high-deductible CDHP and HSA. 

The Washington Post article discussing the study presents a succinct summary of the issues and a detailed snapshot of the current CDHP and HSA landscape.

— David Harlow

Tax-exempt hospitals focus their response to the IRS, which is questioning their status

The IRS inquiry into the tax-exempt status of not-for-profit hospitals continues (i.e., do such hospitals provide community benefits, including charity care, sufficient to justify their tax-exempt status?), and hospital associations and their advisors continue to react to the IRS questionnaire that was sent out to hospitals a while back (see earlier post). 

The AHA wrote a letter to the IRS about ten days ago, pointing out problems with the questionnaire.

PriceWaterhouseCoopers released a report last month entitled My Brother’s Keeper: Growing expectations confront hospitals on community benefits and charity care (available here; registration may be required).  It’s a good read, and is based in part on roundtable discussions with some hospital executives. 

The key recommendations in the PwC report are very pragmatic:

• Review community needs not only at the hospital level, but over larger geographic areas, by teaming with business, community and political leaders.
• Conduct an economic impact study to quantify in dollars additional community benefits generated by the hospital.
• Publicize community benefit results to inform the public about progress to improve the overall health of the community.
• Adopt the CHA/VHA Community Benefit guidelines for both community reporting and on IRS Form 990. Commit to adopting the CHA/VHA guidelines regarding bad debt and Medicare shortfalls by 2010.
• Report charity care at cost, not charges.
• Enhance board involvement in  setting charity care policies, with periodic evaluations of performance.
• Educate and distribute the charity care policy to all hospital employees.
• Clarify policies to clearly identify charity care, as distinguished from bad debt.
• Simplify the charity care application process by integrating technology at the front-end of the qualification process.

The executive summary of the Catholic Health Association (CHA) guidelines on community benefits is available here.  CHA guidance on completing Form 990 released in May is available here.

In September, per a CHA press release, Senator Charles Grassley, who has been spearheading the inquiry into tax-exempt status of hospitals, praised the CHA’s efforts, and noted:

The IRS is creating a supplemental report to the Form 990 to include additional information from non-profit hospitals and their charity care and community benefit. I hope the IRS will give strong consideration to having that new information requirement conform with CHA guidelines.

David Harlow

. . . And then there were four (Massachusetts CON applications for linear accelerators)

Only four of the six CON applications filed with the Massachusetts Department of Public Health earlier this month for radiation therapy services are still pending. 

This week, DPH rejected the New England Radiosurgery application for certain technical deficiencies, and Brigham and Women’s Hospital withdrew its application for a service in Dartmouth, MA. 

In addition to the four remaining applications for new services, three expansion applications are pending as well (including one filed just last week).

— David Harlow

CMS pilots P4P in Medicare population with chronic conditions

CMS is rolling out the "Medicare Care Management Performance Demonstration," a pilot performance-based physician compensation program for small-to-medium-sized physician practices in four states (Arkansas, California, Massachusetts and Utah).

Per the CMS summary of the program,  MMA Section 649 authorizes

a pay-for-performance 3-year pilot with physicians to promote the adoption and use of health information technology to improve the quality of patient care for chronically ill Medicare patients. Doctors who meet or exceed performance standards established by CMS in clinical delivery systems and patient outcomes will receive a bonus payment for managing the care of eligible Medicare beneficiaries.

Practices with at least 50 fee-for-service Medicare beneficiaries are eligible to apply.

The full summary, application and other materials are available here.

— David Harlow

Survey says . . . HIPAA compliance not where it ought to be

HIMSS and Phoenix Health Systems recently released results of their latest semi-annual HIPAA compliance survey. 

Though the deadline for compliance with the HIPAA Security Rule passed over a year ago, 80% of payers and only 56% of providers who responded to the US Healthcare Industry HIPAA Summer 2006 Survey have implemented the Security standards. 

On the privacy front:

  • A substantial percentage of Providers (22%) and Payers (13%) remain non-compliant with the Privacy regulations. These results are consistent with findings in all preceding Surveys since 2004, suggesting that a core group of covered entities either cannot or will not implement the Privacy standards.
  • Even among “compliant” organizations, significant implementation gaps remain in certain areas, including establishing Business Associate Agreements, monitoring internal Privacy compliance, and maintaining ”minimum necessary” information disclosure restrictions.
  • The percentage of reportedly compliant Provider organizations that has experienced privacy breaches decreased from January 2006, from 60% to 52%. Reportedly non-compliant Providers experienced more privacy breaches (64%) than compliant Providers, consistent with January 2006 Survey findings.

See the press release or the full report for more details.

Payors and providers got a free pass for a while on HIPAA compliance; the new enforcement rule effective in March was supposed to change all that. published an article with compliance pointers in August, but a number of commentators have observed a paucity of enforcement efforts.

For example, Rebecca Herold, at The IT Compliance Conversation blog notes:

Instead of clarifying compliance enforcement issues for covered entities (CEs), the Enforcement Rule has seemed to confuse and mislead many CEs into believing that they really don’t need to do much with regard to HIPAA compliance unless the Department of Health and Human Services (HHS), the Office for Civil Rights (OCR) or the Centers for Medicare and Medicaid Services (CMS) come knocking at their door and tell them they specifically need to do something.

(That post includes a link to a podcast on this topic as well.)

Payors and providers should move to come into full HIPAA compliance before the government decides to allow for a private right of action — i.e., lawsuits filed by individuals alleging harm caused by a HIPAA violation and claiming damages.

Physician electronic health record adoption rates vary from 10-25% nationally, to 85% in big-city academic networks

Paul Levy, CEO of the Beth Israel Deaconess Medical Center here in Boston, recently started blogging at Running a Hospital. This week he was bemoaning the fact that even though his hospital’s physicians have an impressive EHR adoption rate of 85%, similar to that of the docs at crosstown rival Partners Health Care, their systems are not interoperable, so the many patients seen by both BIDMC and Partners doctors have to have medical records transferred back and forth the old-fashioned way.

Per a recent Health Affairs article cited in the Washington Post, the EHR adoption rate nationally last year was only about 25%.  And only about 10% of physicians use fully-operational systems.

With the cost for implementing an EHR system pegged these days at about $35,000 per doc, small practices are hard-pressed to get with the program. Even the recently-promulgated safe harbors relating to funding EHR and e-prescribing systems may turn out to be not quite the panacea intended (see earlier post on the perils of tax-exempt hospitals providing funding to for-profit physician groups).

So it’s nice to know that the only problem for some providers is interoperability; for most providers, the hurdles are at a much more basic level.

Even as the interoperability certifications are being passed out for new products, early adopters like BIDMC and Partners will have to spend some serious bucks to allow their existing systems to talk to each other. That’s just one of the costs of being out in front.

In the scheme of things, interoperability is a relatively minor technical problem, and it will be worked out, just as inter-bank ATM network issues have been worked out.

The larger issues revolve around how to tease the full value out of the EHR system: by gleaning best practices information from the tremendous volume of data at places like BIDMC and Partners, and by using the data to build meaningful pay-for-performance systems.  P4P is not yet ready for prime time, but it’s coming down the pike in a big way (see post on recent IOM report), and institutions and practices with the data systems in place will be well-positioned for the future — for negotiating payor contracts, and also for managing their patients’ care.