Archive for December, 2006

Bethesda, MD — Deteriorating relations between hospitals and physicians are imperiling a wide range of health care objectives, researchers from the Center for Studying Health System Change (HSC) report in a Health Affairs Web Exclusive published today.

One consequence of the unraveling hospital-physician relationship is a “medical arms race,” as services once performed only in hospitals migrate to physician-owned specialty hospitals, free-standing ambulatory surgery centers, and physicians´ offices. But the estrangement between hospitals and physicians is also impeding the adoption of information technology (IT), the implementation of pay-for-performance programs, and care for the uninsured.

As one hospital executive told HSC researchers: “Doctors used to feel that in return for having the hospital as a place to care for their patients and earn income, they should contribute to the hospital, taking ED call, participating on committees, improving quality. Now they say to the hospital, screw you. . . . Many don´t even come to the hospital any more.”
The HSC paper is one of the lead articles in a six-article Health Affairs package on the interaction between physicians and hospitals. Two other lead articles offer different approaches to aligning incentives for physicians and hospitals more closely. Dartmouth Medical School professor Elliott Fisher and coauthors propose making “extended hospital medical staffs” accountable for quality and cost. Gail Wilensky, the John M. Olin Senior Fellow at Project HOPE, and coauthors advocate the use of comprehensive gain-sharing arrangements, where hospitals and physicians share savings generated by more efficient care delivery, as a way to transition to a future of integrated delivery systems.

In addition to the three lead articles, package also includes shorter Perspectives by Mayo Clinic president and CEO Denis Cortese and Mayo chief administrative officer Robert Smoldt; Health Futures Inc. president Jeff Goldsmith; and VHA vice president of research Ken Smithson and VHA executive vice president and chief operating officer Stuart Baker.

Toying with us until the end. on Saturday the 109th Congress passed legislation to reverse the pending 5.1% cut in Medicare fees for 2007. Of course, this is the - what, third? - year that there will be no increase in fees, so we’ve lost at least 10 percent or more in income over the past three or so years just from Medicare cuts.

This final action was a 79-9 Senate vote on Saturday morning. We presume that President Bush will sign the legislation. The AMA press release noted that the legislation also sets aside funds to avert cuts in 2008 and stops additional Medicare cuts to rural physicians. Finally, the legislation initiates a physician quality reporting program to begin in July 2008.

With regard to quality and performance reporting, you might take a look at the AMA convened Physician Consortium for Performance Improvement The Consortium is comprised of over 100 national medical specialty and state medical societies; the Council of Medical Specialty Societies; American Board of Medical Specialties and its member-boards; experts in methodology and data collection; the Agency for Healthcare Research and Quality; and Centers for Medicare & Medicaid Services (CMS). I’m working on a monograph for you for early 2007.

OK - time to redo your 2007 budget and projections for 2008. I’d assume flat fees again for 2008 for this round. Work on your inventory levels for office and medical supplies. Take advantage of sales, and check your inventory weekly or even semi-weekly to keep levels low, but so you don’t run out either.

As the 109th Congress raced to the finish line, they left a whole lot of unfinished business. As reported here, Congress did vote to reverse the severe cut in Medicare fees that was scheduled take effect on January 1. Our friends at Kaiser have published a fuller discussion on some items of interest to physicians.

Insurance claims against doctors, nurses and other medical professionals have stabilized for the first time in years, according to the seventh annual Aon Hospital Professional Liability and Physician Liability Benchmark Analysis. While that is good news for the medical community, the bad news is that the average size of malpractice claims continues to rise.
The study, which measured 47,735 claims representing more than $4.4 billion of incurred losses in the U.S., found that the overall frequency of medical malpractice claims has not increased for the second straight year.
While claim frequency is stabilizing, according to the study, the average size (severity) of malpractice claims continues to increase at a rate of six percent. However, the average amount paid to indemnify claimants is
increasing at a rate of only three percent, while amounts paid to defend against liability claims are growing at 17 percent as hospitals invest in claims management.
“The improved frequency rate that first emerged in the 2005 study appears to be sustained through 2006,” said Greg Larcher, director and actuary of Aon Risk Consultants and author of the analysis. “Based on study findings, we believe that the impact of past state level legislative reforms has largely been realized and we do not expect significant decreases in claim frequency or severity resulting from tort reform in the future unless other states pass legislation that withstands challenges. Patient safety initiatives being implemented today, however, may be critical for sustaining a favorable frequency trend into the future.”
This year’s study found that a statistically significant relationship exists between mortality and claim frequency in certain segments of the database. For example, after adjusting for patient volume and acuity, Texas hospitals with 200 mortalities in 2004 experienced 6 indemnity claims while hospitals with 150 mortalities experienced 4 indemnity claims. This finding gives an interesting perspective on how changes in quality might affect claim counts.
Added Larcher, “While it is logical to believe that organizations that reduce preventable harm to their patients will also reduce professional liability claim counts and costs, our study takes a first step at proving this true with data. In the long term, the industry would benefit from a more comprehensive measure of quality, beyond mortality, that measures the success of patient safety improvements and their impact on liability costs.”
More than 700 healthcare facilities provided loss and exposure data for the benchmark study. These participants range from small community hospitals to large multi-state publicly traded healthcare systems. The study also includes breakouts of claim costs and frequency trends by state and facility type, including university, specialty, long-term acute care and community.
The 2006 Hospital Professional Liability and Physician Liability Benchmark Analysis is co-sponsored by the American Society for Healthcare Risk Management (ASHRM) of the American Hospital Association. To purchase a
copy, please dial +1.800.242.2626 and request item #178701. Visit http://www.aon.com/hpl_study for more information.
You can read more of my posts on Medical malpractice here.