Article – Million Dollar Murray

This Malcolm Gladwell article has nothing directly to do with medical imaging or healthcare record integration, which I often discuss here, but does use analytics of data to identify the type of problem distribution (bell curve vs. power law) involved. And this seems to be a very important step to complete before designing a solution to a large, complex problem—such as homelessness and its impact on healthcare costs.

It was originally published 9 years ago, but all the stories and findings are still just as powerful today. And the solutions suggested are considered just as radical nearly a decade later.

I hope you find the time to read it, as I really enjoyed reading it.

The Healthcare Revenue Revolution Continues

I continue to study how healthcare payment reform will affect services like diagnostic imaging. I blogged about it here, and here.

If you are really keen on learning about this topic, I recommend that you follow some of the links provided. Lots of info to absorb.

Now, HHS—in what is being called an ‘historic’ announcement—is making major changes towards value-based reimbursement.

Also, the trends in Revenue Cycle Management (RCM) provide insights to how the financial management leaders see things changing. This article from Healthcare IT News, titled Revenue cycle headed for a ‘new world’, reinforces the trend towards provider consolidation and predicts that RCM will be increasingly outsourced. Worth a read.

One thought I have been musing…

Will value-based reimbursement accelerate the adoption of so called Enterprise Imaging capture and integration within the EMR (using a common platform for image management and viewing)?

Up until now, the ROI on enterprise imaging has been elusive, mostly because it is compared to fee-for-service imaging, like Radiology. However, once the reimbursement model changes, and the improved correlation of images and findings across diagnostic and clinical imaging proves to contribute positively to outcomes (as I expect that it will), the capture and integration of enterprise images within the patient record may be rapidly adopted.

Article – Insurers will have to change to survive

I have been very interested in the changes to how Radiology revenues will be affected during the shift from volume to value based reimbursement, along with changes to healthcare business models in general. I blogged about it here.

I have also been interested in how Radiology will have to change their behaviors in this new environment of transparency and empowered consumers. I blogged about that here.

In this article, a healthcare investment firm details how insurers will have to change in order to compete for mind share among consumers (with choice).

Another very interesting point they make is about wearables. I agree that they are only used by so called Innovators (from the Innovation Adoption Lifecycle model) today.

But what if insurance companies start offering incentives in the form of reduced policy premiums for people that use them (and share the data with the insurer perhaps). This is much like having a security system on your home lowers the cost of your theft insurance, or smoke detectors lowers your fire insurance premiums. This would create a boom in the mHealth sector, and would likely improve outcomes through early detection and correcting unhealthy behaviors.

I wonder: Will providers and insurers compete for who knows the patient best?

Providers have the EMR data (for encounters with their facility), and perhaps from an HIE (if they are part of one). Insurers have info from payment transactions spanning hospitals, clinics, pharmacies and others.

Where will the data from wearables go? If the insurers are buying (by lowering premiums), I will bet that they get it more often that the provider.

Will wearables and mHealth device vendors be savvy enough to provide it to both? Will consumer-controlled PHR vendors (or information aggregation and brokering tools) have an optimized method for getting data from all a patient’s devices and apps into EMR systems? Will the provider’s EMR or HIE be open enough to receive and store the wearable’s data without manual data entry (or copy-paste)?

Will patient’s be willing to share this personal info with providers and insurers? I will bet: yes.

If I thought the data would help my outcome, and I trusted my provider, I would share it.

If it was certain to lower my premiums, I would share the info with my insurer. If the insurer reserved the right to increase premiums based on info that my wearable provided (i.e. if I sit on the couch too long, my payment goes up), I might reconsider.

Will providers supply no cost (or subsidized) wearable and mHealth devices (or apps) to patients? Will insurers and providers share this cost?

So, how can wearables help in Radiology? Other than sending out reminders on where and when to show up for the exam, and what to do (e.g. eating, etc.) prior to the procedure.

Revenue Revolution in Radiology

I have been reading a lot recently about trends in healthcare and imaging around costs and revenues. There seems to be a perfect storm of changes in the market that will have a fundamental impact on diagnostic imaging service providers. I find this topic interesting because, unless you understand how the money is moving, you won’t understand why things are happening. Here is a summary of what I have discovered.

Medicare Reimbursement Cuts

This one is obvious. If you lower the amount of money paid for something, your revenues will go down (unless volume goes up proportionally). Here is an infographic from MITA on the cuts made since 2006.

Fewer Medical Imaging Exams being Ordered

Here is an article from MITA on the decline of the total number of CT exams being done in the U.S. Here is another one citing data published by the American College of Radiology (ACR). It states: “…physicians are calling for less, not more, imaging tests.” This shows a measurable reduction in the volume of exams performed in the U.S. And here is an article indicating a steady decrease in imaging studies being ordered for patients in the ED, following a steady increase up to 2007.

Image Sharing

The sharing of patients’ clinical records across facilities is a key part of Accountable Care, and is generally a good thing for patient care. So is sharing imaging records. With reliable options now available on the market, sites within a local referral area are rapidly launching or signing up to services to share images. The clinical benefits of comparing new imaging exams with priors are well understood, but this practice will often result in avoiding the need to perform a repeat exam. This benefits the patient (less radiation and anxiety and delay), and the operations of the receiving organization (less schedule disruption, less costs due to CD importation). The other impact, of course, is that the receiving organization loses some revenue from that avoided repeat exam. This will result in a reduction in volume of exams performed.

Adoption of Clinical Decision Support

Starting on January 1, 2017, imaging exams will require the use of Clinical Decision Support (CDS) to ensure that physicians are following Appropriate Use Criteria (AUC). In addition to clinical evidence, factors such as relative radiation level and cost of the exam are used to determine what is appropriate. All things being equal, the lower cost exam is likely to be recommended. The adoption of CDS may result in a reduction in volume of exams performed, or a recommendation to a lower cost (profit) exam.

Preauthorization Requirements

In some insurance plans, preauthorization is required before certain exam types can be ordered (even when CDS is used, in some cases). This may require a consultation with a radiologist or Radiology Benefits Management (RBM) company. Here is an article from 2011 on the use of preauthorization and CDS. The larger the burden on the ordering physician, the less likely they are to order the exam, which may result in a reduction in volume of exams performed, or a recommendation to a lower cost (profit) exam.

Patient Steerage

Last year, I did a blog post on an article on the trend of “patient steerage”. The original article is here. Essentially, patient steerage is when a payer incents a patient to use a provider that offers the imaging service at a lower cost. If a service provider is not price competitive, this will result in a reduction in volume of exams performed.

The Castlight Effect

This company received a lot of attention because of the size of its IPO, but it is also notable for what they actually do. As this article explains, they provide healthcare provider cost information for a range of healthcare services to employee health plans. The intent being that, given the choice, consumers will choose lower cost options. This is very likely to happen when the patient has a significant co-pay (e.g. 20%) and they will personally benefit from lower cost options. If a service provider is not price competitive, this will result in a reduction in volume of exams performed.

Wait, but what about Quality?

With all the talk about the shift of reimbursement from volume of procedures to quality or outcomes, I found this tweet on Castlight interesting… Castlight Tweet If we shift away from volume incentives/payment, reduce the prices paid (through policy or competition), but don’t recognize quality, the service of diagnostic imaging has been commoditized, and I don’t think that this will benefit patients, in the end.

Consolidation

I have heard a couple of opinions that believe that the strong trend of consolidation among healthcare providers will allow the largest of providers to dictate terms and pricing to payers. As it was explained to me, it works like this: The big, well-known healthcare provider, which has bought up many of the facilities in the area, tells the insurance payers, ‘If you don’t give me preferential pricing for my services, I won’t accept your insurance plan at my facilities’. If the healthcare provider is big enough and well respected, the insurance provider will have a tough time selling insurance plans to companies and individuals when the buyer learns that they can’t go to the big provider. This is called leverage. If this is true (and I think that it is), this will result in isolated areas of reimbursement stabilization or even increases. Here is an article talking about what the impact of provider consolidation means to private payers. It cites a steady increase in the number of physicians becoming employees of hospitals (vs. independent private practices)…

“…the number of doctors employed by hospitals increased to over 120,000 from 80,000 between 2003 and 2011. About 13 percent of all doctors are now employed directly by hospitals.”

A Necessary Change in Revenue Cycle Management Systems

Here is an article on the need for an overhaul of Revenue Cycle Management (RCM) systems in the U.S. It includes some stats on administration costs per transaction (compared to financial services transactions) and consolidation trends, as well as the value of analytics. Some excerpts…

“…the number of hospitals per integrated delivery system took a big jump last year from 6.4 to 7.1…”

“…the physicians who go into practice do not want to be entrepreneurs as much as they used to. When 52 or 53 percent of residents today become employees of integrated delivery systems, it tells you that the whole market has changed.”

Using Analytics to Maximize Revenues

Here is an article on using analytics and their reports to optimize financial operations.

So, what do you think?

P.S. Here is an interview that goes into the details of payer vs. provider, along with a case for more bundled payments. And here is a blog post that goes into more detail on bundled payments, including the shift from retrospective to prospective bundles.

P.P.S. Here is an article explaining the difference between charges and costs.

P.P.P.S. Here is a notice of rule changes proposed by CMS on the method by how physicians fees will be determined. “…we are updating our practice expense inputs for x-ray services to reflect that x-rays are currently done digitally rather than with analog film.”

P.P.P.P.S. Here is an article on a study on the disparity of costs for a Mammogram in the L.A. area. $60 to $254 for self-pay, with a bill of $694 to the insurance company for the same procedure elsewhere. 30% of Mammograms in the study were self-pay.

P.P.P.P.P.S Here is an article, with a nice infographic, on 5 common medical practice denials and remedies. Spoiler alert: Radiology made the Top 5 list of unexpected denials.

P.P.P.P.P.P.S Here is an infographic on the declining employment demand and income of Radiologists by a medical recruitment firm.

Report – Second Annual Practice Profitability Index: 2014 Edition

This report is well-written (in plain language) and is worth a read. While it does not specifically refer to medical imaging practices, the trends are consistent.

My clients are certainly facing similar challenges, especially declining (or changing) reimbursement, changes to adopt ICD-10, and “ripping and replacing” systems. The shift from independent private radiology practices is also shifting to very large groups (consolidation) or hospital employment.

Second Annual Practice Profitability Index - 2014 Edition

Blog – Who should pay Doctors?

I enjoyed reading this blog post. It provides some important context around the costs of a primary care practice and the extra, unpaid work they often have to complete in order to “do the right thing” for their patients.

Having gone from being an employee to a business owner/operator, I can attest to the added business and accounting skills one needs, along with the extra work that has to be done, to ensure that the operation is viable. I have been lucky enough to find many IT tools, and services providers, to minimize the effort to run my business, but I am not dealing with all the regulations and complexity of multiple payers’ policies that doctors are. How can healthcare IT let doctors get back to provide care?

Article – Forecasting a New Reality for Radiology — An Investment Banker’s Thoughts on How Imaging Will Evolve

A lot has been written on consolidation of Radiology practices in the U.S.. This article in Radiology Today reiterates the economic and regulatory forces behind this trend, but also includes some points on the emotional aspects felt by those that built Radiology practices and are faced with selling.

One point not raised in the article is the operational efficiencies that can be found in IT consolidation. An effective IT organization using a modern image and management platform, backed with skilled staff can enable Radiologists to focus their efforts on quality of service delivery, and not on IT installation, configuration, upgrades, etc.

Favorite Blog Posts of 2013

As the first calendar year of my blog draw to a close, I thought I would compile a list of my favorite blog posts from 2013. I hope everyone has a safe, happy, healthy and prosperous New Year.

  1. 100th Blog Post: What I know about Software Development and Crisis Management
  2. The rise of the mobile-only user …and how this helps the underpriviliged
  3. Review of Stage 2 Meaningful Use Test Procedure for Image Results …and other MU tests
  4. Quebec EHR …the difference 2 years makes
  5. Video – Empathy: The Human Connection to Patient Care
  6. Designing for the ‘Public’ and the ‘Pros’
  7. Articles on Mobile Health Applications and FDA Regulation
  8. Plug-ins vs. APIs
  9. Article from HIMSS: PACS will not remain a self-contained data silo
  10. Blog posts on SIIM Web site (Part 1 and Part 2)

Article – Registries playing catch up with Stage 3

As Meaningful Use criteria advances to require sharing of population information with registries, this article explores some opinions on the readiness of public health agencies to accept and manage this data.

Is Radiology ready now? Check out all the ACR registries.