It’s Becoming More About “The Patient”

It’s hard to believe that the healthcare customer (see Why Medicare Is The Customer) has only recently begun focusing on “the patient”.  Up until now, the focus has been almost entirely on “the service”. It has been about justifying “the service” with appropriate documentation to ensure entitled reimbursement. It is has been about providers focusing on volume and the efficiency of “the service” to lower cost in order to survive with lower reimbursements.

The result of focusing on “the service” rather than “the patient” has been well documented. In an Organisation for Economic Co-operation and Development (OECD) report comparing countries, the United States ranks number one is healthcare spending and low scores in overall health. The United States spends $7,940 per person which is more than twice the average ($3,233) of the 40 countries in the survey. It had the highest obesity rate (34%), ranked 27th in life expectancy and 31st in infant mortality.

This is all about to change.  The customer began focusing on “the patient” on October 1, 2012 by penalizing hospitals up to 2% for poor performance. In the next 3 years, the entire reimbursement will shift toward caring for “the patient” over time.  The new reimbursement models being rolled out reward effective and efficient care for:

  • Patient’s hospital stay plus 30 days (Value-Based) – Readmission penalties, Patient Satisfaction, etc.
  • Patient’s hospital stay plus 90 days (Episodes)- Medicare’s Bundled Payment for Care Improvement, Commercial or Employer Bundled Payments
  • Patient over 12 months (Population)- Medicare’s Shared Savings Program Accountable Care Organizations, Patient Centered Medical Homes

In order to reduce cost and improve health, the best place to start is with patients with 3 or more chronic conditions. According to the a Robert Wood Johnson study, these patients use 90% of the entire Medicare budget.  The patients are often called “frequent flyers” checking in and out of hospitals many times each year. With the focus on “the service”, the patients Dr. Jeffrey Brenner calls “superutilizers” have gone virtually unnoticed. Dr. Brenner found a patient that had 113 visits to the hospital in one year when they were setting up a service to address this problem in Camden, NJ.  There are numerous scientific studies that demonstrate the cost justification of these patient-centric programs for patients. The issue is that there is virtually no reimbursement for these programs.

Without the new reimbursement models, providers would continue to do exactly what the customer asks and pays for, provide “the service”. Providers would continue to focus on justifying “the service” with documentation, billing and collection of their reimbursement.  Each provider may have provided amazing service (per reimbursement) to the patient that visited the hospital 131 times. Yet the patient is being treated unfairly by the healthcare system and taxpayers have to pick up the $1M plus tab.

Providers have been getting squeezed between reimbursement rates that barely cover costs and no reimbursement for innovative patient-centric services such as remote monitoring, care management and physician eVisits. The most logical reason for the lack of reimbursement for ‘e’ services is that they did not exist when the current reimbursement system was created as a result of the Balanced Budget Act of 1997. Physicians are willing to offer these services and respond to our emails and texts, they just can’t do it for free.  Patients would love to have the options of eVisits or office visits just like they have the choice of going to the bank or the ATM machine. If physicians offer these services today, we would need to pay for them out of our pockets (which is beginning to happen).

The good news is that the new reimbursement models being developed will shift the focus from “the service” to “the patient”. Patient-centric care will improve patient recovery, lowering overall cost and improving outcomes. The new models will require meeting the needs of the patient over a period of 30 days (value-based), 90 days (episodes) and 12 months (population). Then, the patient-centric services we want will become embedded in care delivery. It will be virtually impossible to successfully manage an episode of care (bundled payments) or population health (ACO, PCMH) without continuously leveraging the latest science and technology. Providers will get the tools and reimbursement to help patients more effectively manage their health.

We don’t need to do a study to determine that acute chronic patients cost more to care for than healthy people. The Patient-Centric focus on just the top 10% of the population that use the most services will result in reducing average per person healthcare spending, improve infant mortality and life expectancy.  Once the new science and technology of the patient-centric platform is developed for the superutilizers, it will evolve into a cost effective platform for all people. Just like the first iterations of the cell phone evolved into 6 billion active cellphones. It will become the patient-centric healthcare we want.


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