Financial Returns from E-Prescribing – Saving Medicare $2.1 billion

July 23, 2008 / Michael D. Miller MD / Access to Healthcare, Delivery of Healthcare, Economics & Financing, Information & Communications, Innovation, Medicare, Quality of Care & Safety / 5 Comments

The leadership of HHS had a tele-conference on Monday to highlight the new Medicare incentives for physicians to adopt e-prescribing systems. What the Washington Post and Kaiser Family Foundation reported about this press briefing that wasn’t in the HHS press release was that the Acting Administrator of CMS said that the per physician cost of e-prescribing systems is about $3,000 up front, and then $80-400/month for operation and maintenance.

These numbers caught my eye, because with the incentives in the Medicare bill, the break-even point for physicians is as follows:

First, let’s assume that the per month cost is $240 (the mid-point between $80 and $400), or $2,800 per year.…

The Face of Free Government Health Care

June 30, 2008 / Michael D. Miller MD / Economics & Financing, Medicaid, Miscellaneous, Politics, State-Level Healthcare Reform / No Comments

A couple of months ago I wrote about how one percent of adults in the US get free government health care. While the statistics in the February Pew study were very interesting (and somewhat shocking), I saw a report in a local Connecticut newspaper (The Day, June 26th) that put a face on these statistics.

The Day’s story was about Jihad Abdulshaheed, a 36-year-old man who had been incarcerated since November 2007. The judge was prepared to sentence to a one year sentence, and since he had already served at least 50% of his time, under the Department of Corrections guidelines for nonviolent prisoners he could have been released the next day.…

Cutting Medicare Physician Payments – Beyond the 10.6%

June 22, 2008 / Michael D. Miller MD / Economics & Financing, Federal Healthcare Reform, Health System Reform, Medicare, Politics / 1 Comment

The focus on Medicare payments to physicians for the last six months has been on the 0.5% increase Congress enacted for the first 6 months of 2008 to replace the 10.1% reduction that would have occurred under Medicare’s Sustainable Growth Rate (SGR) formula. Legislation to continue this rate for the rest of the year failed a required procedural vote in the Senate last week.* This leaves Medicare physician payments after June 30th uncertain – although it is expected that Congress will do something in the next week, or three.

However, beyond the impending Medicare 10.6% reimbursement reduction for all physicians, the Graham Center of American Academy of Family Physicians published a short report on June 13th that expands the analysis to include pending change in how Medicare reimburses physicians in Physician Scarcity Areas (PSAs), and Health Professional Shortage Areas (HPSAs).…

MedPAC Gets Real About Promoting Primary Care

June 15, 2008 / Michael D. Miller MD / Access to Healthcare, Delivery of Healthcare, Economics & Financing, Health System Reform, Medicare / 1 Comment

The Medicare Payment Advisory Commission released its annual report to Congress on Friday. In chapter 2 of its report, MedPAC makes two significant proposals for improving the financial incentives for primary care providers.

Great Incentives for Primary Care Practitioners Not Just Primary Care Services
First, it recommends changing Medicare’s reimbursement system for “evaluation and management” (E&M) services. While last year Medicare increased payments for E&M services, they couldn’t differentiate between types of physicians providing these E&M services, i.e. the Medicare system doesn’t distinguish between a family physician and a cardiologist if they are providing the same type and level of intensity of service.…

Behavorial Economics and Fixing Healthcare’s Cultural Problems

June 3, 2008 / Michael D. Miller MD / Economics & Financing, Health System Reform / No Comments

Peter Orszag, (the Director of the Congressional Budget Office), delivered a very interesting speech last week to the National Academy of Social Insurance about “Health Care and Behavioral Economics.” He discussed how behavioral economics – which combines insights from psychology and economics – can both help to explain cost and quality problems in the US health care system and be used to begin developing solutions to these problems. This seems – at least to me – to be a very reasonable approach to understanding why individuals and populations don’t respond according to standard economic theory – which assumes both perfect knowledge and benefit maximizing actions.…

Tax Exempt Status for Health Care Organizations – Get Some Fact$

May 29, 2008 / Michael D. Miller MD / Economics & Financing, Politics / No Comments

I’ve been following the controversy about the tax-exempt status of non-profit organizations* since several hospitals (including the major teaching hospital affiliated with my alma mater) were chastised several years ago for charging uninsured patients more than insurance companies would have paid, and then sending collection agencies after these people. This was follow-up by Congressional hearings and investigations. More recently a bill was introduced here in Massachusetts to tax college and university endowments that are over $1 billion (which includes my undergraduate alma mater), and a few days ago the New York Times had an article about this issue and a state court case denying the tax-exempt status of a daycare center.…

More Perspectives on Health Information Technology – Can We Call It Prevention?

May 23, 2008 / Michael D. Miller MD / Economics & Financing, Information & Communications, Quality of Care & Safety / 2 Comments

A few weeks ago I wrote about the challenges of adopting electronic medical records to provide value for different stakeholders and the entire health care system. Well, this week the Congressional Budget Office released a paper on “Evidence on the Costs and Benefits of Health Information Technology.” This paper is a reasonable review and synthesis of the literature, but it’s important to recognize that the CBO’s mission is to focus on how federal legislation can change government spending.

While the paper concludes that savings from adopting HIT are generally uncertain, it does make some supportive comments about its value.…

End of Life Issues: Clinical and Cost Considerations

May 16, 2008 / Michael D. Miller MD / Clinician-Patient Relationships, Delivery of Healthcare, Economics & Financing / No Comments

At a policy related forum for medical residents at the Massachusetts General Hospital last week, one of the questions was about end of life care. The other panelists and I answered from a clinical perspective – and I also put a plug in for the Kenneth B. Schwartz Center which does educational programs for clinicians about strengthening patient-caregiver relationships and communications.

However, during the informal discussion after the panel, a number of the residents raised questions about how much of our healthcare spending goes for treating people at the end of life. In talking with them about this, I recalled three things having looked at this issue several years ago: First, there is a lot of public misunderstanding and misrepresentation of information about this topic.…

Health Reform Evolution

May 12, 2008 / Michael D. Miller MD / Economics & Financing, Health System Reform, Medicare, Politics, Private-Employer Based Health Insurance / No Comments

Placing health reform in an historical context shows how the debate has evolved. For example, the National Bipartisan Commission on the Future of Medicare was formed to address Medicare’s projected insolvency – at a time when the overall focus for health reform was on cost containment. However, while the Commission met and deliberated, the booming economy shifted the debate away from cost containment towards access and coverage expansion, and the Commission’s 1999 final report, proposed adding an expensive outpatient drug benefit to Medicare.

Comparing two more recent perspectives on the future of the US healthcare system also illustrates how thinking about health reform evolves.…

Electronic Medical Records: Salvation or Sinkhole?

May 6, 2008 / Michael D. Miller MD / Economics & Financing, Information & Communications, Medicare, Quality of Care & Safety / 14 Comments

Electronic medical records (EMRs) have been touted as one of the solutions for healthcare’s cost and quality problems. But why haven’t we seen more benefits from EMRs?

Disconnect Between Costs and Benefits
The simple answer is that there is a disconnect between those who have to pay for EMRs and those who benefit from them. For example, many (if not most) national health reform proposals call for investing billions of dollars in EMR systems claiming that EMRs will save the healthcare system lots of money. However, these savings projections hide many important factors related to the timing of any potential savings, and how different stakeholders would be affected.…

Health Care Cost Containment – Reality versus Rhetoric

May 2, 2008 / Michael D. Miller MD / Economics & Financing, Federal Healthcare Reform, Politics / No Comments

Cost Containment
Controlling Healthcare Costs
Reducing Health care Spending
Eliminating Waste, Fraud and Abuse
Creating More Value from Healthcare Spending
Increasing Cost Effectiveness for the Healthcare Dollar

These are the types of headlines and catch phrases that we are going to see over the next 6 months as the healthcare focus in the 2008 elections zeros in on spending and costs.

A couple of weeks ago I wrote about how the economy has become the #1 issues of concern for the 2008 elections. Because of this, costs and spending will be the major focus for the political debate about healthcare reform.…

1 of 100 Adults Gets Free Government Health Care

April 21, 2008 / Michael D. Miller MD / Access to Healthcare, Delivery of Healthcare, Economics & Financing, Medicaid, Politics, Private-Employer Based Health Insurance / No Comments

A recent report from the Pew Foundation indicated that 1 out of 100 adults in the US get free government health care with no premiums, deductibles or co-payments. The reason this report didn’t get more media attention was because the 1% of Americans getting free government health care are behind bars – as in prison or jail.

The Pew report indicates that for the first time, more than 1 in 100 adults in America are in prison or jail. That’s over 2.3 million in state or federal prisons or local jails, and the numbers and percentages have been growing. (See the Department of Justice chart below)

This data is an interesting launching point into other aspects of our current health care system’s problems:

First, health care costs for people behind bars represent about 10% of the costs of incarceration.…

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