He is a freelance writer based in Cleveland

Ken Krizner

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The move by some employers to raise deductibles, co-pays, and out-of-pocket expenses for their employees is fueling a concern about bad debt as patients walk away without paying up. Real-time information would prevent much of the guesswork, but today real-time transactions are more of an exception than a rule. 

Often, it can cost more for physicians to collect smaller amounts than the actual debt itself, putting providers in a bind. Members might feel that they don't owe any fees once they walk out of a provider's office, reasoning that insurance will take care of the bill.  

"The growing popularity of consumer-directed health plans translates into a number of issues, including members who don't know how much they owe when they go to the doctor," says Augusta Kairys, vice president of provider relations for Highmark, a Pittsburgh-based health insurer. "At the same time, doctors have historically not been good at collecting these amounts. Once a patient walks out of the office, the chance of collecting owed money drops. That means bad debt for the provider." 

Real-time technology can help streamline the transaction by giving providers the up-to-the-minute data on each member's deductible and financial responsibility before they leave the care site. 

"It will create a much stronger process to make sure there is a collection of member liability," Kairys says. "It's an essential tool for providers and members." 

Real-time technology in hospitals can help staff keep track of expensive equipment, for example, which can maximize use and the return on the investment. 

The bottom line is that real-time technology can help the healthcare industry control its costs if it is used to its fullest extent, says Orie T. Mullen Jr., vice president and chief operating officer of Louisville, KY-based Humana Military Healthcare Services, an administrator of the Department of Defense's TRICARE program.  

Humana Military uses Availity's Health Information Network, a secure Web portal that employs real-time technology for inquiries into eligibility, benefits, and claims' status. Between 70% and 75% of its claims are processed electronically (up from slightly more than 50% during the past three years).  

The insurer, which provides healthcare services to nearly 3 million active duty and retired military personnel and their families in the southern U.S., expects the technology to reduce costs and improve the member's experience, Mullen says. 

For providers, real-time technology means a claim can be processed that much quicker. Mullen says the "human element" is eliminated because there is no need to translate and interpret a document manually.  

"Providers file the claim right into our system," he says. "They get paid quicker."  

For members, the biggest benefit is understanding their out-of-pocket contributions upfront, he says. The potential is also there for members to research treatment cost ahead of time. 

Kairys says real-time technology has the promise to improving members' awareness of not only what they are paying for in terms of their own treatments and procedures, but also the true cost of healthcare. 

Highmark, which serves more than 4.5 million members in Pennsylvania, uses real-time tools through its provider portal. Real-time claims processing and member liability estimation gives providers the ability to reconcile payment for services at the point of care. 

The portal's tools have enabled physician practices to obtain reimbursement from Highmark within three days instead of 15 to 20 days, Kairys says. 

"It's helpful to us to have a consumer educated about what they are paying for and understanding the care they are getting," Kairys says. "We feel a member will be more strongly engaged in their treatment plans if they question some of the costs of their healthcare." 

It's all about visibility and access to data according to Mullen.  

"It reduces inefficiencies and the cost to providers and the health plan, and it improves the patient experience," he says. 

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While that information is useful, it only scratches the surface of what claims data can tell health plans and payers about their members. By accessing electronic claims data, health plans can mine, analyze and download information about members individually or collectively. This data can be used to determine which members are at risk for specific health issues and inform disease management program design to help them before the event occurs. 

"So much of the information that would tell a plan what is driving the cost of healthcare is either unavailable or late," says Keith Lemer, president of WellNet Healthcare in Bethesda, Md. "What winds up happening is you don't get to the root cause of the problem-what is driving costs and what type of action can be implemented on the appropriate segment of the population to keep those costs down." 

"They [patients] are not high dollar yet, so no one is paying attention," she says. "By the time they are in the hospital, it's too late to do anything about preventive care. You've already incurred big dollars." 

TOWNSHIP'S STRATEGY BASED ON PREVENTION							

Upper Merion Township in suburban Philadelphia launched a multi-year assessment of its healthcare strategy in order to control costs. The community, with a population of 27,000, is self-insured through a PPO arrangement for its 200-plus employees and 30-plus retirees. Healthcare costs were draining the general fund budget, according to Fred Santoro, director of human resources for the township.  

"The increasingly negative budget impact [of healthcare costs] was threatening to affect the level of services we provide to our residents," he says. 

Instead of opting for a short-term fix or shrinking benefits for its employees, Upper Merion used claims data to take a long view of utilization. First, the township negotiated a cost-sharing plan with its workforce. Employees, for the first time, contributed to the cost of healthcare at a flat rate of $656 annually, no matter the level of coverage. Costs were paid 100% by the township previously.  

"Part of our strategy is to get our employees more involved in cost containment," Santoro says. "One of the ways to do that is to give them a stake in the process." 

Since the township was asking its workforce to share in the cost, officials wanted to reciprocate by building preventive care measures into its healthcare solution. Upper Merion and WellNet Healthcare, its DM provider, implemented a software solution that uses electronic claims data from the prescription benefit program to provide a summary of members who are at the biggest health risk so that they could receive care management and the proper attention and education before an adverse event occurs, Santoro says. At the same time, the technology allows Upper Merion to gain a view of past, present, and future healthcare-cost scenarios for the township. 

The technology platform electronically deposits pharmacy claims data daily into an interface that resides on the human resource and finance departments' desktop computers. The real-time, consolidated data is available in a centralized, online dashboard, and the snapshot of information delivers an actionable overview of patterns and warning signs associated with the township's plan expenses.  

"This helps to determine cost-saving plan decisions," Santoro points out. 

From the employees' perspective, the technology's member engagement tool is a patient portal that allows users to coordinate all aspects of their healthcare in a HIPAA-compliant manner, Santoro says. Members can communicate with care managers, claims specialists and providers, and they have the ability to research conditions, compile a PHR, review medications and claims, track spending and manage incentives. 

The program has been in place for less than a year, so there is no hard evidence of cost savings yet, but Santoro says township officials are convinced that in three to five years, the township will achieve a 4-to-1 return on its investment in prevention. 

"That's the benchmark we're shooting for," he says. "It will be a positive if we get anything more than a 1-to-1 ratio." 

Prevention is just one area where electronic claims data can be leveraged for cost-containment purposes. Jeffrey Allison, engagement manager for the Michigan Public Health Institute, which studies the state's Medicaid program, says electronic claims data, in conjunction with other quality measures, can be used to improve patient care and outcomes. 

"We can use the data to determine the cost of care [for patients] when preventive care is used versus those who did not have preventive care, and wound up in acute care for the same disease states," he says. "That allows us to try to make more preventive care available." 

That is one clear reason why the federal government, employers, plans and others who seek to control costs tout the need to enhance electronic data.  

"Within claims data, you see what the actual results are for the various disease states," says Matthew Haddad, president and CEO of Medversant Technologies, a Los Angeles software company. "You can see some definite patterns over time. The data can tie treatments and procedures with outcomes." 

And with the drive to push providers to adopt EHRs and members to adopt personal health records, electronic claims data can become the hub of information.  

"It helps bring pieces of information together, so providers can more clearly understand what is going on with the patients they are working with," Casenet's Hunt says. "You need the entire picture to have a real impact. Claims data is a key piece because it identifies opportunities and figures out where there are areas of underutilization and overutilization. Plans can look for people with the greatest opportunity for intervention." 

Santoro says the preventive care strategy in Upper Merion has gotten some of its older employees to think proactively about their health.  

Without electronic claims data, the strategy would have been useless, he says. "The statistical information about high-risk populations and potential costs down the road could not be done without technology," he says. "You might eventually be able to gather the data. But not in a timely way, which means it would be of little use in preventive care."  			

Ken Krizner is a senior editor in Advanstar Communications' Centralized Content Group. 

Data mining and predictive modeling can get us over the electronic data hump until EMRs reach critical mass

Claims data still a secret weapon in care, cost containment

MORE THAN 650 HOSPITALS have pledged to adopt the Leapfrog Group's policy on "never events"-rare medical errors that should never happen to a patient.  

				A never event (also known as a serious reportable adverse event) is an error in medical care that is clearly identifiable, preventable and serious in its consequences for patients, and indicates a real problem in the safety and credibility of a healthcare facility, according to the National Quality Forum (NQF).

NQF has adopted a list of 28 never events. Examples of a never event include surgery on the wrong body part, a foreign object left in a patient after surgery, mismatched blood transfusion, major medication error and preventable post-operative deaths. 

One study, reviewing 18 types of medical events, concluded that medical errors may account for 2.4 million extra hospital days, $9.3 billion in excess charges (for all payers) and 32,600 deaths, according to the Leapfrog Group. Another study concluded that never events add significantly to Medicare hospital payments, ranging from an average of an additional $700 per case to treat decubitus ulcers to $9,000 per case to treat postoperative sepsis, according to the Centers for Medicare & Medicaid Services (CMS).  

The Leapfrog Group follows the NQF definition of a never event. Its policy mandates that hospitals: waive all costs connected to a never event; apologize to the patient and/or family; report the event to at least one agency (the Joint Commission, a state reporting program for medical errors or a patient safety organization); and perform a root cause analysis consistent with instructions from the chosen reporting agency. 

"The motivation behind our policy is to provide a tool for hospitals to handle a rare but ubiquitous problem," says Rachel Weissburg, Leapfrog Group program associate.  

While the Leapfrog Group policy is voluntary, many states are adopting regulations and laws that compel hospitals to adopt such a policy. 

At least 13 states use the NQF list in whole or in part as the basis for their public reporting systems, although states are under no obligation to let NQF know whether they adopt or adapt the list. 

In 2005, Minnesota became the first state to require the public reporting of NQF's list of never events. This followed a law implemented in 2004 that requires hospitals to report never events to the state Department of Health, which are publicly reported annually. 

HealthPartners, based in Bloomington, Minn., built on this legislation by implementing a policy that stops payments to hospitals for never events. The policy, which was implemented in 2005, also prohibits hospitals from billing members for a never event. 

The policy also requires hospitals to comply with the state's reporting act, including the investigation of a never event, reporting its underlying causes and taking action. 

HealthPartners contracts with virtually every hospital in the state of Minnesota. 

"Our policy builds on the state's policy," says Babett Apland, senior vice president, health and care management, for HealthPartners. "With the leadership of Minnesota in creating a [reporting] policy, we saw an opportunity to continue that leadership relative to payment policy." 

Apland says that HealthPartners' policy brings a consistent approach to a never events policy.  

"Our sense was that even before our policy went into effect, some hospitals were systematically stopping billing when a never event happened," she says. "But it wasn't clear that this was consistent." 

There is no bonus or incentive for hospitals to adhere to the policy. 

More than 650 hospitals have pledged to adopt the Leapfrog Group's policy on "never events"-rare medical errors that should never happen to a patient.

Hospitals voluntarily enact Leapfrog Group's policy on "never events"

Laws have been implemented in at least 15 states to force hospitals to improve their prevention efforts. In Massachusetts, a new law calls for mandatory education of healthcare workers and penalizes facilities that don't comply with prevention measures. In California, a bill signed into law in September will impose new reporting and prevention measures on hospitals beginning next year. Pennsylvania and Missouri are among the states that require hospitals to publicly report their rates. 

A study conducted by the Pennsylvania Health Care Cost Containment Council showed that when looking at private sector insurance reimbursements in the state, the average payment for a case with a hospital-acquired infection was $53,915, while the average payment for a case without a hospital-acquired infection was $8,311. 

"It is a difficult area to control," says Victor Caraballo, MD, senior medical director of quality management for Independence Blue Cross in Philadelphia. "The causes are multi-variant and involve different areas of the hospital and different levels of staffing. It's a major patient safety concern." 

Each patient on a general floor alone can have upward of 20 different encounters with staff in one day. Patients with compromised defenses and trauma victims on ventilators are most susceptible to infection, but any patient is at risk. 

Numerous clinical studies, including one from Johns Hopkins University, show that relatively simple changes in behavior-better hygiene by the hospital staff, for example-can have a profound impact. There appears to be evidence to reinforce the findings of those studies. 

Michigan hospitals that rigorously implemented infection-control procedures, such as doctors and nurses washing their hands and cleaning patients' skin with an antibacterial agent before inserting intravenous lines, reduced catheter-related blood stream infections in intensive care units patients from an average of 7.7 per 1,000 days of catheter usage to 1.4 per 1,000 days within 18 months, according to a report in the 

Some hospitals are collaborating to meet the challenge. In Philadelphia, the Healthcare Improvement Foundation, the Delaware Valley Healthcare Council and Independence Blue Cross have created the Partnership for Patient Care (PPC), a quality and patient safety effort by area hospitals.  

Those involved in the partnership discuss collaborative ways to encourage the rapid adoption of evidence-based medicine and uniform procedures for preventing infections. Hospitals use a method called Failure Mode and Effects Analysis to analyze processes and outcomes with the aim of finding new and improved ways to prevent infections.  

"What we found is that cooperative efforts are very useful," says Charles Wagner, MD, chief medical officer of Holy Redeemer Hospital and Medical Center in Philadelphia, one of the facilities involved in the PPC.  

The primary cost to patients with hospital-acquired infections is a prolonged stay and additional therapeutic interventions. But because of the high financial costs, there is increasing outside pressure to decrease infection rates.

Ken Krizner

Articles

To speed up transactions, there's no time like real time

Claims data still a secret weapon in care, cost containment

Hospitals voluntarily enact Leapfrog Group's policy on "never events"

Hospitals look to improve infection-prevention measures