Information Advantage Grouprsquos Healthcare Digest is focused on the emerging delivery models for the hospital to consumer continuum In a fast-read format we provide only the vital news that is essential to keeping you current on the latest and most germane trends ideas results technological developments and resources Simply click on a category relevant to you below to jump to the news topics click on the Linked Topic Tit le to be taken to the source article Most sources are publicly available you may have to subscribe for others

Innovation Trends

Trend Drivers HIE ACO

Medical Home Physician amp Professional

Consumer amp Caregiver

Oversight amp Influence

Innovation Trends

Clearly the trend toward hand-held healthcare and remote care devices that the patient or a home caregiver can use is adding to the digital growth curve Telehealth continues to get more attention with the VA continuing to prove the benefits of the technology that is leading to its vigorous expansion of pilot programs Together high tech medical device traditional telehealth and telecommunications interests may amass a strong lobbying effort to secure better reimbursement Without reimbursement the anticipated ldquoconsumer miraclerdquo in not showing signs to be strong enough to drive the market

Digital Is The Only Growth Medium For News According to the Pew Research Center study The State of the News Media 2011 people are spending more time with news than ever before but when it comes to the

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platform of choice the web is gaining ground rapidly with digital news being the only media sector seeing audience growth The December 2010 showed

41 of of US citizens polled said the internet is where most of their news about national and international issues came from up 17 the previous year

46 of people now say they get news online at least three times a week surpassing newspapers for the first time

Cable news joined the ranks of older media suffering audience decline

The study suggests control of the data will be one of the bigger issues To deliver news in the digital world content must fit the rules of device software and transport vendors This gives them some control over the audience and also access to the revenue steam The implication for healthcare is that patient and caregiver preferences for content and engagement will continue to escalate the need for digital technologies AMA Ethics Forum ldquoLemon Droppingrdquo of Patients May Increase Due To Electronic Medical Records [NOTE Lemon-dropping or dumping = The termination of care for a patient because they are difficult costly elderly have multiple chronic medical problems low health literacy or otherwise unwanted patients] In an AMA Ethics Forum response Jim Bailey MD MPH and Carson Strong PhD (both professors Dept of Medicine University of Tennessee Health Science Center) discussed the concerns on how the practice of lemon-dropping over the past 20 years has added to rising health care costs They suggest that the adoption of electronic medical records and analytics offers a powerful way to mine data and assist in selection of optimally profitable patients - federal privacy regulations do not specifically prohibit these activities by physicians The authors state that patient selection of this sort is unethical because

These practices are expected to increase both taxpayer and employer-funded health care costs

Continuity of care is disrupted and can produce adverse health outcomes particularly for our most vulnerable citizens

Unfair competitive practice providers who do not engage in these practices will care for a disproportionate number of sicker more costly patients

(AMA Ethics Forum April 18 2011)

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Telemedicine and Diabetes Monitors To Show Greatest Growth in Global Home Health Market According to a new healthcare market research report lsquoHome Healthcare Market (2009-2014)

The home telemedicine services market is forecasted to show a 32 CAGR from 2009 to 2014

Diabetes devices alone constitute about 46 of the entire home healthcare equipment market while the market for home therapeutic equipment is the fastest-growing segment with a CAGR of 194

In 2009 the global home healthcare market is estimated to be approximately $1596 billion in 2009

The home healthcare services market is estimated at $1431 billion about 90 of the entire market is expected to grow to $2070 billion by 2014

A shift of patientrsquos focus from hospitals to home care is affecting a rise in proactive monitoring opportunities

Patients prefer home healthcare over hospitals mainly for the latterrsquos cost and convenience benefits and are thus increasingly opting for third-party medical professionals and caregivers

70 of revenues are from those aged 65 years and older

Hot Consumer Product - Home Defibrillators Market research publisher Kalorama expects home use defibrillators will be the number one growth item in the home care products industry through 2014

The home care products market is expected to grow by only 22 through 2014 the home defibrillators segment is expected to grow at a whopping 171 during the same period

This growth is seen as indication of the willingness of consumers to take on the responsibilities for sophisticated medical procedures performed at home In the US an estimated 18 million people receive some kind of home health care from

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either professional or unpaid caregivers and most of these individuals require home care products VA Invests $138 Billion In Drive Toward Advancing Telehealth Services Continuing with its trend toward telehealth and a 2010 budget increase of 50 over 2009 the Department of Veterans Affairs awarded contracts to six IT vendors to run its massive telehealth program for the next five years The prize About $138 billion in VA telehealth contracts The individual vendor contracts run anywhere from $150 million to $372 million over the five-year period The smallest of the new contracts--$150 million is just shy of the agencys entire telehealth budget of $163 million last year (Fierce Mobil Healthcare April 14 2011) VA Moves Toward Patient Hand-Held Communication Devices The Department of Veterans Affairs is now piloting a handheld device veterans can use to contact their primary-care providers Veterans can use the software to communicate with clinicians and also store personal military and family health information VA officials say theyre hoping that on the clinical side the technology will help treat conditions like post-traumatic stress disorder and traumatic brain injury (Fierce Mobil Healthcare February 1 2011) VA Sees Remote ICU Telehealth Monitoring By Clinicians Reducing Mortality And Length Of Stay A literature review of thirteen studies conducted between 2004 through 2010 and covered 41374 patients at 35 ICUs across the country by Veteran Affair researchers showed

20 reduction in mortality a length of stay by 13 days through the use of telehealth services to monitor ICU patients

Telehealth interventions included videoconferencing telemetry and remote access to electronic medical records that enabled off-site ICU clinicians to intervene early and help guide treatment 64 Of Docs Using Smartphones A new survey of 5400 physicians from Knowledge Networks for the pharmaceutical industry found

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64 of physicians use a smartphone 27 percent of primary care providers and specialists say they have a tablet

This somewhat confirms a mid-2010 Manhattan Research survey that found that 72 of physicians in the US used a smartphone or PDA (Mobihealthnews March 31 2011) Physicians Love The iPhone But iPad And Android Are Starting To Get Their Share Although Neilson recently crowned Android devices as dominate in the consumer market Applersquos iPhone and iPad still hold a commanding lead over all competing platforms in the physician market Bulletin Healthcares analysis of 550000 healthcare providers including more than 400000 physicians who subscribe to their daily email briefings between June 1 2010 and February 28 2011 and accounts for roughly half of the practicing US physicians found

Mobile consumption of medical news climbed by 45 between June and February

30 of healthcare professionals now access the daily medical information on mobile platforms compared to 70 using traditional desk platforms

The iPhone and iPad combined accounts for more than 90 share of use in February Android 6 and all others including RIM and Palm barely registered

Share changed - iPhone use fell to 79 from 86 in June 2010 while iPad share nearly doubled to 14 in February 2011 up from 8 in the previous June

Devices based on Googlersquosreg Android operating system more than doubled their share between June and February

Mobile device use by specialty showed

Physician Assistants ndash 41

Emergency Room Physicians ndash 40

Cardiologists ndash 33

Urologists ndash 31

Nephrologists ndash 31

Dermatologists ndash 30 Gastroenterologists ndash 30

Psychiatrists ndash 28

Optometrists ndash 28

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Radiologists ndash 24

Rheumatologists ndash 22

Endocrinologists ndash 21

Oncologists ndash 20

Clinical Pathologists ndash 16

(Medical Smartphonescom April 6 2011) American Telemedicine Association Calls For Removal Of Telemedicine Restrictions Recommendations include

Medical videoconferencing for the 35 million beneficiaries who live in metropolitan areas

Store-and-forward of medical images for the 43 million beneficiaries who dont live in Alaska or Hawaii

Physicians to judge the appropriate ACO use of telemedicine for otherwise covered services

Home-based medical videoconferencing and Otherwise covered therapy services to be delivered via telehealth

(ATA April 25 2011) 2011 ndash Surge In Wireless Point Of Care Mobile Device Approvals With the FDA giving 501(k) clearance to Abbottrsquos i-STAT 1 Wireless point-of-care blood analyzer it becomes the fourth wireless-enabled medical device to receive FDA clearance this year and joins Ascom Monica Healthcare and Mobisante The wireless model allows the transmission of data from the hospital bedside to a central computer allowing physicians to receive immediate test information in the electronic medical record We can only surmise how helpful this will be in the medical homeremote monitoring model Abbott there are about 50000 i-STAT devices are in use worldwide and they process about 100 million test cartridges annually As to mobile software applications (apps) the FDA has cleared more than a dozen software apps for mobile devices over the years including one this year Mobile MIM (Mobihealthnews April 3 2011) Top 5 Apps at Harvard Medical School While Harvard Medical School does not distribute mobile devices or recommends

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applications to its students however they think itrsquos OK for them to use their favorites The schoolrsquos CIO John Halamka surveyed their medical students and residents to find out just what they are using most The five apps include Dynamed ndash A clinical reference tool created by physicians for point-of-care situations and

CEU Unbound Medicine uCentral ndash Aggregates popular medical publications to an iPad

including 5 Minute Clinical Consult A to Z Drug Facts Drug Interaction Facts and others

VisualDx Mobile ndash Physician-reviewed clinical reference with medical images showing the variation of disease presentation through age stage and skin type

Epocrates Essentials ndash A workhorse all-in-one mobile reference guide covering drugs disease conditions diagnostic and laboratory tests and OTC products

iRadiology ndash A quick review of classic radiology cases and images for medical students and residents

(Mobihealthnews April 19 2010) Health Games May Prove To Be Very Helpful A new category - Health Video Games - is showing early signs of showing value than though before according to a Journal of the American Medical Association (JAMA) article Games that have a motivating narrative that moves users toward defined goals provides clear feedback awards points delineates levels of competition encourages teamwork and trading and in some cases uses an avatar to represent the player move them past casual entertainment Some data on efficacy does exist

77 reducing of diabetes related ER visits over six months by users of Packy amp Marlon--an older Nintendo - The game allows players to inhabit a character with Type I diabetes perform glucose testing make food choice and perform other activities to manage his condition

Another study in the March issue of Archives of Pediatrics amp Adolescent Medicine found that a segment of six highly active video games provide the equivalent of anywhere from moderate to vigorous exercise and keep kids off the couch

Creation of The Robert Wood Johnson Foundations Health Games Research Initiative is intended to vet health games effectiveness and thus applicability to the $10 billion set aside in the Affordable Health Care Act for disease prevention and education (Fierce Mobile Health April 6 2011) Healthcare IT Consolidation Sets Record -Stocks Outperform

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And MampA Volume Set All Time High Health Growth Partners (HGP) Q1 report on healthcarersquos IT vendor market shows

Healthcare IT stocks outperformed broader markets during the first quarter with a doubling of returns seen from the SampP 500

HGP Payer Index was the performing index which posted gains of nearly 30 during Q1 2011

Healthcare IT and services MampA posted its strongest quarter on record Transaction volume during the quarter was 33 higher than the quarterly average in 2010 which was 36 higher than 2009

MampA trends include

The ACO movement and other integrated payment models is driving investment in data collection transport storage analytics and care management technologies

Large enterprise and non-traditional HIT companies are aggressively pursuing a stronger foothold in this sector with acquisitions

Healthcare reform has payors advancing new HIT strategies that address risk and data management and the medical loss ratio in the coming environment leading to heightened interest in acquisition and investment

The HITECH Act continues to drive spending for new applications in an effort to meet Meaningful Use requirements and

This favorable market has attracted private equity investors looking to capitalize on it

(HGP April 20 2011)

NEWLY RELEASED - HELPFUL INNOVATION TRENDS RESOURCES

Healthcare Information Technology and Related Services Quarterly Market Report Q1 2011 - An excellent summary of healthcare IT market activity from Healthcare Growth Partners an investment banking services company Meaningful Use Crib Sheet ndash Physician Perspective HITRUST FRAMEWORK - Developed in collaboration with healthcare and information security professionals the Common Security Framework (CSF) is the first IT security framework developed specifically for healthcare information HITRUST offers a series of videos to provide an introduction to the CSF and related programs It is only through registering for a subscription that individuals can access the CSF A FREE Standard subscription at no charge is available to any organization employing a function or activity involving the use or disclosure of individually identifiable

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health information provided that said organization does not provide technology or security products or services

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Trend Drivers

With a slow return to positive economic signs itrsquos still not enough to overcome people having higher copays and not having enough money to pay for healthcare or retirement With quality improvement efforts over the last decade barely improving the cost curves there is a question of whether the new models of healthcare will help ndash early ACO results (later in the newsletter) say yes

Consumer Sentiment Turning Upward On April 29 2011 the University of Michigan as its revised consumer confidence index did better than expected for April increasing a bit to 698 from the 675 March level Banks Starting To Lend More - A Key Ingredient For Future Growth In The Economy Banks are beginning to show an uptrend in lending activity Although only growing at a 7 annualized rate since December it is seen as the beginning of a new lending cycle brought about by increased confidence on the part of banks and businesses (Seeking Alpha April 20 2011) Inflation Remains Low ndash Healthcare At 3Same As Food

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Trend Drivers

With a slow return to positive economic signs itrsquos still not enough to overcome people having higher copays and not having enough money to pay for healthcare or retirement With quality improvement efforts over the last decade barely improving the cost curves there is a question of whether the new models of healthcare will help ndash early ACO results (later in the newsletter) say yes

Consumer Sentiment Turning Upward On April 29 2011 the University of Michigan as its revised consumer confidence index did better than expected for April increasing a bit to 698 from the 675 March level Banks Starting To Lend More - A Key Ingredient For Future Growth In The Economy Banks are beginning to show an uptrend in lending activity Although only growing at a 7 annualized rate since December it is seen as the beginning of a new lending cycle brought about by increased confidence on the part of banks and businesses (Seeking Alpha April 20 2011) Inflation Remains Low ndash Healthcare At 3Same As Food

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Labor Department reports point to fast rising energy and food costs drove consumer prices 05 higher in March just like the prior three months and on a year-over-year basis

Overall inflation is at 2 the highest level since December 2009s 28

Inflation has been running at 6 for the last quarter and 4 for the last six months

Healthcares 65 contribution to the CPI is showing about a 3 inflation rate year-over-year almost the same as food and beverage

The WSJ touted ldquoUnderlying Inflation Remains Tamerdquo

Concerns center on another few months like the most recent may be replace price declines in early 2010 with big increases and shoot the CPI sharply higher

(Seeking Alpha April 15 2011) WSJ Deloitte Macro Survey - 20 Serge in Revenues Needed To Trigger Substantial HiringIts Not All Bad Despite corporate earnings showing double-digit gains for the last six quarters a quarterly Deloitte poll completed at the end of February of 77 CFOs of mostly $1 billion annual revenues public and private companies in the US Canada and Mexico showed

Almost 50 would want to see a 20 increases in earnings to substantially stimulate hiring

Only 11 thought that a 10 increases in revenues would produce hiring Those surveyed estimated only a line growth for North American to be 82

this year up from Q4 estimates of 65 for 2011 Healthcare Mention Not even a major revision to the healthcare reform or

incentives like lower corporate tax rate or payroll tax would stimulate CFOs to add employees

Department of Labor numbers appear to support these results February job openings rate rose to 23 from 21 a month earlier and a total of 31 million jobs at the end of February - unemployment remains around 9 (WSJ April 14 2011)

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Patients Not Buying As Many Prescriptions Medication Recent slowing of growth in sales of prescription drugs was attributed to fewer doctor visits and fewer people starting new therapies according to a new study from IMS Institute for Healthcare Informatics IMS attributed this drop to high unemployment levels and the rising costs of healthcare motivating patients to spend more conservatively on healthcare Highlights of the study include

Patients made 42 fewer visits to doctors in 2010 Sales of prescription drugs in the United States grew just 23 in 2010 ($307B total

spent) down from 51 growth rate in 2009 ($300B total spent) On a real per capita basis spending increased by 06 compared to a 31 increase in 2009 $898 per person in 2010 up from $876 in 2006

The total number of patients starting new treatments for chronic conditions fell by 34 million compared to 2009

(IMS April 2011) $17 Billion In Harmful Medical Injuries A study published in Health Affairs (April 2011) looks specifically at measurable medical errors that harm patientsmdasha subset of medical injuriesmdashand examines direct medical costs rather than indirect costs such as malpractice insurance premiums Highlights of the examination include

Measurable medical errors that harmed patients cost an estimated $171 billion in 2008 or 072 of the $239 trillion spent in the US on healthcare that year

10 errors are accountable for 69 of the total medical cost for measurable medical errors the researchers noted

In first place postoperative infections were the most costly error totaling $33 billion in medical costs followed by pressure ulcers at $32 billion

The other eight errors included

Mechanical complications of non-cardiac device implant or graftmdash$1 billion total medical cost

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Post laminectomy syndromemdash$995 million total medical cost

Hemorrhage complicating a proceduremdash$678 million total medical cost

Infection due to central venous cathetermdash$589 million total medical cost

Pneumothorax (collapsed lung)mdash$569 million total medical cost

Infection following infusion injection transfusion or vaccinationmdash$566 million total medical cost

Other complications of internal prosthetic device implant and graftmdash$398 million total medical cost and

Ventral (abdominal) hernia without mention of obstruction or gangrenemdash$342 million total medical cost

(CMIO April 19 2011) Most Healthcare Is Paid With Other Peoplersquos Money In response to a Paul Krugmans recent opinion piece in the NY Times that Patients Are Not Consumers Dr Mark J Perry professor of economics and finance at University of Michigan argues that rising healthcare costs will not be controlled until we do treat patients as consumers Dr Perry argues that over time most of healthcare has gradually been paid with other peoples money

Almost 90 of health care costs are paid by third parties (insurance companies government and employers) and only about 11 is paid out of pocket by patients

Consumer health models have been successful and we need to look no further than lasik surgery retail health clinics concierge medicine medical tourism and cosmetic surgery to name just some of the successful consumer-based medical services

(Carpe Diem April 22 2011) Growing Number of People Wonrsquot Have Enough To Retire

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53 of non-retired Americans do not think they will have enough money to live comfortably in retirement up 40 from 32 in 2002

28 say they will retire before age 65 - down 40 from 47 in 1995

(Marketing Charts April 2011) Most Support Raising Taxes AND Leaving MediMedi Alone The recent national survey of 1274 US adults by McClatchy-Marist showed Overall support for raising taxes rose 5 64 approved raising taxes on incomes above $250000 ndash 64 independents 83 Democrats and 43 of Republicans supported higher taxes 80 of Americans clearly dont want the government to cut Medicare or Medicaid -even among conservatives 68 opposed cuts to these programs (McClatchy April 18 2011) Robert Wood Johnson Thinks Economies Of Scale Rather Than Risk Will Drive Insurance Exchanges A Robert Wood Johnson brief concludes multi-state insurance exchanges are most likely to be structured on shared administrative structures and efficiencies rather than risk Economies of scale large metropolitan areas that cross state lines pooling across state line and establishing critical mass for stable risk pools are reasons detailed in the brief (Robert Wood Foundation April 2011) Health Affairs Policy Brief - Improving Quality And Safety Is Still Glacial 23 Despite multiple efforts since the IOM report a decade ago quality improvement throughout much of the US health care system is still proceeding at a glacial pace if at all The recently published National Healthcare Quality Report by the Agency for Healthcare Research and Quality (AHRQ) reveals that in 2009 while nearly two-thirds of 179 measures of health care quality did show improvement the median annual rate of change was only 23 percent This briefing offers a comprehensive review of past quality measures and current regulations - a good foundation piece (Health Affairs April 15 2011)

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NEWLY RELEASED - HELPFUL RESOURCES

The Direct Project - Office of the National Coordinator for Health IT (ONC) has released ldquoThe Federal Health IT Strategic Plan 2011-2015 an 80-page last published in 2008

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HIE

It remains to seem like the early days for HIEs parties still thinking about when what and which vendor to choose to reach quality of care goals Not so obvious are the concerns for financial sustainability for the HIE after funding runs out

KLAS Health Information Exchange Study An Over view of drivers HIE vendors and buyers preferences shows

32 would choose a HIE vendor within twelve months Only five of 38 vendors mentioned are mentioned more than 10 of the

time Public Cooperative and Private HIEs are the leading buyers types each with

their own unique needs Epic is the vendor for HIEs that are planning to include 15 or more

hospitals Medicity and Axolotl seem to be popular among smaller HIEs Technology (38) and cost (23) are the overwhelming leaders in selection

criteria merely 5 of see meaningful use as a key criterion for HIE vendor selection and

Improving the quality of care (62) is the main driver for forming an HIEs savings (26) comes in at a distant second

NEWLY RELEASED - HELPFUL HIE RESOURCES

HIE Toolkit by eHealth Initiatives CMS Meaningful Use Calculator Measures Steps Taken To Meet Requirements - E-prescription Systems Market to Reach $204 million - The US e-prescription market is projected to reach $204 million according to a new report by Global Industry Analysts (GIA) With 45 billion prescriptions being written annually the growth rate of prescriptions being written errors and adverse drug events are the major drivers

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ACO

Motivations and expectations of those planning for an ACO are being pulled by good early results from efforts like CALPERS and Cigna On the other hand the proposition of an ACO is being scrutinized if not disparaged by large advisory consultancies Accurate monitoring and analysis are driven by strong concerns for financial viability and appropriate population management Again IT needs are anticipated to be a challenge and a key ingredient for success

The Leap To Accountable Care Organization Survey An April 2011 Survey of provider management about ACO plans and perceptions by MedLeaders show that 64 think health quality will improve and 32 think FFS with shared risk will be the best payment structure Other highlights Include

91 do not have an ACO 64 are planning to have an ACO 52 have no operational target date 30 think 2012 and

48 think the medical staff supports an ACO 45 not sure What will the ACO include

80 clinical pathways 74 care coordinators amp RNs and 70 Medical Home

What are the drivers for an ACO

72 better clinical integration 60 risk shifting to providers and 57 market competition

What are the barriers

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43 risk of inadequate payment rates 34 lack of good EMRIT and 26 physician resistance

(HealthLeaders Survey April 2011) NEFM What Might We Expect From An ACO This NEJM perspective article includes asking What can we reasonably expect of the coming wave of ACOs Although not all past models of quality improvement and shared savings have worked as expected they point to the Medicare Physician Group Practice (PGP) Demonstration to get some ideas on what we might expect

All ten participants in the PGP demonstration met at least 29 of the 32 quality goals which focused on process measures related to CAD diabetes CHF hypertension and preventive care

60 of the demonstration sites produced savings amounting to $78 million in Medicare expenditures

(NEJM March 31 2011) CALPERS To Expand Itrsquos ACO Pilots Based On Positive Outcomes ndash Anticipates $155 Million In Savings CalPERS launched itrsquos ACO pilot that involves 41000 members in January 2010 in partnership with Blue Shield of California Catholic Healthcare West and Hill Physicians Medical Group Early results from the January to October 2010 period show

50 reduction in the number of patients hospitalized for 20 days or more 17 reduction in hospital readmissions A 14 reduction in total inpatient days and A half-day reduction in the average length of inpatient hospital stays

As a result of the positive patient outcomes CalPERS said it expects to expand the pilot ACO program for Blue Shield enrollees (California Healthline April 13 2011) Positive Results Drives Cigna To Double Itrsquos ACO Pilots Cigna has announced plans to double its ACO pilot programs due to good results in quality improvements and cost cutting since first stared in 2007 Successes at

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their Cigna Medical Group of Arizona and since 2008 at Dartmouth-Hitchcock Medical Center have shown

Annual savings of $336 per patient 11 reduction in the cost of ambulatory surgery A rise of 3 in the number of preventive care visits that includes an

increase of 12 for adults and A 10 improvement in closing gaps in care due to the care coordinator

monitoring patients for follow through on appointments and medical tests Cignas model is slightly different than the commonly though of ACO program due to it being structured on patient-centered medical home tenants and commitment to frequent and open collaboration and communication Cigna currently has 12 initiatives across 11 states involving 100000 Cigna customers and 1800 physicians (FierceHealth April 1 2011) Deloitte Thinks A Low Percentage Of Beneficiaries Will Be In An ACO A critical read by Deloitte Center for Health Solutions of the March 31 2011 HHS proposed regulation on accountable care organizations assumed that

Only 11 of Medicare beneficiaries would participate in an ACOs about five million - on page 352 however the guidance suggested a lower range of 15-40 million

The Center observed that some provider communities will possibly choose to create clinically integrated delivery systems through other means like episode-based payments and medical homes and other payment models the new Center for Medicare and Medicaid Innovation may propose The Center urged providers considering forming an ACO to consider three questions

Do you want to create a clinically integrated delivery model in which physicians hospitals long-term care and allied health professionals join together in a formal structure to assume risk for costs and outcomes

Are you prepared to make investments in infrastructure and changes in operations to achieve optimal results

Do you have the core competencies to manage population-based outcomes and costs as well as the associated insurance risk Or should you outsource these functions

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The review goes on to make ten other points about ACO plans that include

Savings could exceed estimates An ACO performing in the 10 is expected to save 07 percent on its Medicare expenditures or $960 million If an ACO optimizes quality and savings potential they could keep as much as 60 percent of savings above a 2 threshold

Although the law states an ACO needs minimum of 5000 Medicare beneficiaries to qualify 20000 would scale better

Read the report by the Deloitte Center for Health Solutions on ACOs (Beckers Hospital Review April 5 2011) Hierarchical Condition Categories (HCC) Can Under Predict ACO Expenses As a follow up to ldquoThe ACO Model ndash A Three-Year Financial Lossrdquo article in the March New England Journal of Medicine about Medicares Physician Group Practice (PGP) ACO demonstration project that operated from 2005 through 2010 Singletrack Analytics a financial consulting group had a couple of observations about how cost sharing payments were calculated and where the best successes were found

Four practices that received payments and were either affiliated with an academic center or freestanding physician groups did well

Possibly having a hospital as part of the mix was hypothesized as a potential deterrent to achieving savings because of the effect of reductions in admissions under ACO practices on the hospitalrsquos revenue

Those who failed showed a lack of alignment of financial incentives between managed care organizations and hospitals similar to the 1990s when this was the principal cause for the failure of many of these affiliations

The four PGPs that earned cost-sharing payments in the second year showed that they operated at the same level as pre-demonstration period - they were winners before the project even started

The article goes on to discuss how under the PGP project the targets were set based on HCCs which are common payment adjustments currently used for reimbursement and very likely to be utilized for ACOs A previous study found that HCCs under-predict the expenses of Medicare beneficiaries with both CHF and osteoporosis by about 30 and by about 20 for patients with CHF alone The amount of under-prediction increased as the functional status of the patients decreased Singletrack Analytics went on to recommend that groups having a large proportion of patients with multiple chronic conditions risk being underscored for those

21TOC

patients Such groups may be born losers having little opportunity for financial success in an ACO (Beckers Hospital Review April 1 2011) ACOs May Negatively Impact Medically Underserved Communities A report by The George Washington University School of Public Health and Health Services advocates that when it comes to ACOs underserved communities are at a disadvantage because the Affordable Care Act prohibits health center-formed ACOs from partaking in the Medicare Shared Savings Program and the assignment of Federally Qualified Health Centers (FQHC) Medicare patients to ACOs for shared savings reasons According to the report the Accountable Care Act negatively impacts the poorest beneficiaries who are often at the highest health risks penalizes medically underserved communities that lack primary care physicians discourages health centers affiliation with hospitals and specialty practices and impacts the ability of health center patients to participate in other shared savings programs such as Medicaid and CHIP (George Washington University School of Public Health April 20 2011) AMGA Puts Some Distance Between It And Proposed ACO Regs The American Medical Group Association takes credit for getting accountable care organization provisions included in the Patient Protection and Affordable Care Act - it is now distancing itself from the proposed ACO regulations recently issued at the end of March 2011 by the CMS The association claims to actively formulating formal comments and urges members to submit comments of their own to the CMS Heritage Foundation Thinks ACOs Will Fail In a long briefing The Heritage Foundations states that given the complexity of healthcare ACOs will not only fail but most likely exacerbate the very problems they are trying to fix In their view the guidelines are untested and vague and fall short because they

Do not empower consumers to be stakeholders in their own care

Do not encourage provider accountability

Create an unfair competitive advantage for large organizations

(The Heritage Foundations April 18 2011 Six Technology Essentials for ACO Infrastructure

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A General overview of what IT infrastructure is needed for an ACO including

Financial Infrastructure Validate budget goals based on beneficiary population track performance payments received and administer chosen payment methodology (such as shared savings) to participating providers

Reporting Infrastructure Monthly performance reports population management trends such as disease and case management and utilization and practice variation reports

Performance Management Disease-specific dashboards comparison of actual results to benchmark data and performance targets and adherence to evidence-based medicine

Data Aggregation Aggregation and sharing of administrative and clinical data from disparate sources and shared disease registry accessible and enriched by all participants

Clinical Data Exchange Hospital shares detailed procedure information and discharge plan with a patients primary care physician and physician shares outpatient care history with the admitting hospital and

Role-Base Security Access to aggregate cost and quality trends by governance and project teams secure repository for shared aggregate and detailed data and sharing of patient-specific clinical data between responsible caregivers

(Becker Hospital Review April 27 2011) Advisory Board Buyer Beware Of Vendors Claiming Full Featured ACO Systems ndash ldquoLots Of Kool-Aid Going Aroundrdquo Jim Adams managing director at the Advisory Board Company consultancy and veteran leader of HIMSS Analytics thinks that even hospitals at the most developed stage of healthcare IT are not ready for ACOs He sees ACOs will require a lot more IT horsepower than just a working EMR Strong connectivity data warehousing analytics and predictive modeling technology supporting disease care and utilization management applications are essential Identifying opportunities to reduce costs disseminate payment and calculating shared savings the goal Adams estimates that t will take four years of intense ACO building to get the needed data analytics and five years for predictive modeling (Health Data Management April1 2011) ACO Accreditation Standards Due In July Ten healthcare organizations have finished a month long pilot to test the National Committee for Quality Assurance (NCQA) accreditation program for accountable care organizations (ACOs) and is the final step before issuing standards in July (CMIO Aprils

23TOC

19 2011) FTC And DOJ Call For ACO Comments Due By May 31 On March 31 the US Department of Health and Human Services issued rules for ACOs to be formed by hospitals insurers and doctors In a separate act the US Federal Trade Commission and the Justice Department will conduct antitrust reviews of proposals to form networks under the new health-care law ending for now a discussions which agency will have the responsibility This now opens public comment on the two agencies jointly proposed policy guidelines articulating how ACOs can serve Medicare beneficiaries and patients with private health insurance without raising competitive concerns The policy statements include

The types of ACOs to which it will apply

How and when the FTC and DOJ will apply particular antitrust analyses to those ACOs

Describe ACO antitrust safety zones

Outline the CMS-mandated antitrust review process for certain other ACOs

Procedures for ACOs to gain additional antitrust clarity if they fall outside the safety zone but below the CMS-mandated antitrust threshold

Comments are to be submitted electronically here by May 31 2011 (Bloomberg March 31 2011 HealthLeaders April 1 2011) Antitrust Surveillance Of Health Systems By DOJ Department of Justice is increasing efforts to police hospitals and insurers it believes are illegally blocking fair competition In the first case of its kind since 1999 the DOJ has sued United Regional Health System in Wichita Falls for allegedly encouraging health insurers not to do business with competing hospitals That practice allowed United Regional to keep its monopoly according to the lawsuit while it also became one of the most expensive hospitals in the state The hospital disputes that its practice created a monopoly and became one of the more expensive hospital in Texas but agreed to a settlement requiring it to change how it contracts with private insurers At the same time these enforcement efforts are increasing federal antitrust authorities have issued guidance that offers a more flexible response to providers that form accountable care organizations - ACOs will initially make up only a tiny fraction of the health care market The tactic that got the Texas hospital in trouble will remain illegal for ACOs Case detail are in the article (Kaiser Health News April 5 2011)

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NEWLY RELEASED ndash HELPFUL ACO RESOURCES

Easier 213 Page ACO Proposed Regulations - Issued by HHS as a 429 page document an easier to read and navigate product version is available in hard copy and MS Word format and was reduced to 213 pages The Patientrsquos Role In ACOs FTC Proposed Antitrust Enforcement Policy Statement Special Edition ndash Expert Commentary On ACOs - SPECIAL EDITION April 2011Expert Commentary on the CMS FTCDOJ IRS and OIG ACO RegulationsGuidance (Accountable Care News April 2011) The Commonwealth Fund amp National Academy For Health Policy State Roles In Promoting ACOs February 2011 Accountable Care Organizations ndash American Hospital Association Research Synthesis Report The American Hospital Association Brooking-Dartmouth ACO Toolkit PWC Designing A Health It Backbone For ACOs Essential Population Management Tools For ACO - A 60-page guidance for healthcare providers preparing for Medicares payment system change from fee-for-service and episodic care to Accountable Care Organizations has been both scattered and expensive to date eHealth Initiative Reports Evolution Of Care Delivery- Accountable Care Organizations And Preparing For Implementation SEC 3022 Medicare Shared Savings Program American Association Of Family Practice The Family Physicianrsquos Blueprint For Success George Washington University Hirsh Health Law And Policy Program Brief A good Implementation Brief providing an overview of the April 7th proposed rule as well as the Proposed Statement of Antitrust Enforcement Policy and the initial policies related to participation by nonprofit health care corporations and waiver of federal fraud and abuse laws

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MEDICAL HOME

Patient Centered Medical Home practices continue to rack up savings and acceptance by the patient Still the need for strong IT infrastructure is called for to help specialty practices adapt

Patients Have Not Heard Of Medical Home (PCMH) But They Like The Ideas According to The Patient Poll a survey of Pennsylvania adults conducted by the Institute for Good Medicine at the Pennsylvania Medical Society the public isnrsquot exactly sure what a patient centered medical home is and that only 96 had heard of the term However respondent found the principal ideas of PCMH were appealing or very appealing at high rates including

91 stated that having their own team of health professionals 90 like the idea of PCMH teams being led by physicians 93 better communications and access via phone email and extended hours 91 liked better attention to their future health needs 94 liked improved quality of my health

(Pennsylvania Medical Society April 24 2011) Medical Home Model Save $333 Per Medicaid Patient In The First Year Savings of more than one million dollars in the first year of the Chemung County NY Medicaid medical home that cares for 3000 of their 19000 Medicaid patients Using a computer program to monitor and find cost savings savings of $150K were enjoyed by seeing patients in the clinic instead of the ER Using this as a model official estimates are ranging up to $2 million In this small county about 70 of property taxes goes to pay for their share of Medicaid With proven saving to date 1000 additional patients using the clinic is the goal for the end of the year (wetmtv April 19 2011) Physician Office-Based Health Coaches Produce 400 Returns For Medical Home Model Physician Office-based Health coaches (POHCs) have play a key role in patient

26TOC

engagement cross-continuum care management additional outreach and other important functions in the new model of care Mercy Clinics has exceeded a 400 return on investment in its own health coaches by relieving physicians of clerical and nursing work increasing the number of office visits allowing the clinics to bill higher levels of service increasing testing revenue and supporting pay-for-performance initiatives The Advisory Board Company--a research consulting talent development and technology services firm partnering with over 2900 of the worlds leading health care organizations--is collaborating exclusively with Mercy Clinics to further develop and market an enhanced POHC training program as well as other medical home-related training programs Since 2008 over 100 health coaches have received POHC certification (The Advisory Board April 14 2011) Medical Home Practice May Lower Use Of Diagnostic Tests Recently a pioneering oncology practice in Philadelphia received NCQA certification as a medical home practice Although the NCQA medical home program focuses on primary care a few specialty practices have gained medical home recognition and can be seen as a threat Pathologists clinical labs and other diagnostic services may loose business in that other medical specialties may decide to be a medical home practice and become more careful users of tests under standardize evidence-based medical guidelines(Dark Daily Clinical Lab News April 21 2011) America Academy Of Pediatrics Calls For Robust IT For Medical Home A policy statement from the American Academy of Pediatrics Council on Clinical IT in the Journal of Pediatrics emphasized that portable and comprehensive electronic health records are necessary to support a medical home model for childrens primary care The policy statement also listed some of the most important IT capabilities for a pediatric medical home including

Data security

Comprehensive records

Maintaining secure and comprehensive patient records that includes a patients family health history immunizations medical care and prescriptions in an easily accessible database

Monitoring treatment outcomes

Educating and sharing information with patients and their families and

Data aggregation and analysis for research and quality improvement

(iHealthbeat April 28 2011)

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NEWLY RELEASED - HELPFUL MEDICAL HOME RESOURCES

AAFP Guidelines For Health Exchanges Include PCMH Endorsements - The American Association of Family Practice (AAFP) has created a set of eight principles designed to help member chapters address insurance exchange issues with state legislators and regulators under the Patient Protection and Affordable Care Act The document includes quality eligibility and PCMH endorsements (AAFP April 27 2011) Community Health Accreditation Program - Created in 1965 and through ldquodeeming authorityrdquo granted by the Centers for Medicare and Medicaid Services (CMS) CHAP has the regulatory authority to survey agencies providing home health hospice and home medical equipment services to determine if they meet the Medicare Conditions of Participation and CMS Quality Standards it has more than 5000 agencies currently accredited nationwide Patient Centered Primary Care Collaborative Medical Home and Diabetes Care - Practices in the Spotlight The Medical Home and Diabetes Care lays out the intersecting quality priorities of structured high-value diabetes care management and the principles of the medical home National Academy For State Healthcare Polity - ldquoState Multi-Payer Medical Home Initiatives and Medicarersquos Advanced Primary Care Demonstrationrdquo - Briefing by the National Academy for State Health Policy February 2010 Grants From The Cautious Patient Foundation - This outreach and educational arm of PatientAlwaysFirst a nonprofit organization committed to educating and empowering patients announced that over the next twelve months CPF will grant out $100000 ranging in size from $2000 to $7000 to support projects proposed by individuals groups or nonprofit organizations They have found that by providing individuals with the right tools and information to effectively interact with their own healthcare system patients begin to experience better quality of care (News Medical April 19 2011)

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PHYSICIAN amp PROFESSIONALS

Physicians are stepping up to the challenge of reducing healthcare costs

Brand Awareness and Strong SEO key to attracting Physicians Online According to a March 2011 comScoreImpactRx Physician Behavioral Measurement Solution study

Most US physiciansrsquo seeking online sources of health information in Q3 2010 were driven primarily by direct non-referred access and natural search

Paid search referred visits represented a relatively small percentage of physiciansrsquo overall traffic to health-related sites

80 of online users look for healthcare information ranks third behind email and search

comScore advises that this underscores the importance of building brand awareness and effective SEO strategies in order to reach physicians online (MarketingChartscom April 2011) Bain Survey Of Physicians ndash Physicians Actively Moving To Control Costs A new survey of 500 US physicians from Bain amp Company shows that physicians believe that part of the burden of lowering healthcare costs rests directly on their shoulders

80 of physicians agree or strongly agree that it is part their responsibility to bring healthcare costs under control

35 of physicians say that compared to 5 to 10 years ago they are less likely to try new products

Physicians are also cutting costs by limiting the practice of defensive medicine according to the report

29TOC

Physicians are increasingly becoming more comfortable with standards of care because they are a defensible position in case of litigation and

33 of physicians anticipate being a part of an ACO or medical home in the next two years

As the reimbursement world moves away from a time when they were paid for activity to one of delivering wellness physicians are recognizing that a systemic change is under way (PharmExeccom April 20 2011)

30TOC

CONSUMER amp CAREGIVER

Although mixing social media and healthcare presents a promise for the distant future caregivers have a strong appreciation for what IT can do for them - devices and communication technology will raise the quality of their lives and the patientrsquos

Social Media Not So Powerful for Online Retail Attention marketers - if you are rushing to increase your social media spend take note A new collaborative study between Forrester Research and GSI Commerce analyzed data captured from online retailers between November 12 and December 20 2010 The research shows that social media rarely leads directly to purchases online

Less than 2 of orders were the result of shoppers coming from a social network The report found email and search advertising were much more effective vehicles for turning browsers into buyers

5 to 7 of purchases are influenced by social media outreach making it somewhat effective for distributing news about short-term deals

(Mashablecom April 2011) NOTE In a March released study by Capstrat-Public Policy Polling survey 85 said they would not use social media or instant messaging channels for medical communication if their doctors offered it (Healthcare IT News March 24 2011) Consumers Think Social Media May Impact Their Medical Decisions Americans think highly of the usability of social media but are tempered in crowning it the premiere source of health care information when considering all options 25 of respondents said social media was likely to impact future health care decisions 32 said they had a high level of trust in social media sites Only 75 said they had

very low trust 50 preferred heath provider websites to any other source 14 preferred combining

hospital websites and social media Just 3 preferred only social media Those with a household income of $75000 or above were more likely than lesser

30TOC

CONSUMER amp CAREGIVER

Although mixing social media and healthcare presents a promise for the distant future caregivers have a strong appreciation for what IT can do for them - devices and communication technology will raise the quality of their lives and the patientrsquos

Social Media Not So Powerful for Online Retail Attention marketers - if you are rushing to increase your social media spend take note A new collaborative study between Forrester Research and GSI Commerce analyzed data captured from online retailers between November 12 and December 20 2010 The research shows that social media rarely leads directly to purchases online

Less than 2 of orders were the result of shoppers coming from a social network The report found email and search advertising were much more effective vehicles for turning browsers into buyers

5 to 7 of purchases are influenced by social media outreach making it somewhat effective for distributing news about short-term deals

(Mashablecom April 2011) NOTE In a March released study by Capstrat-Public Policy Polling survey 85 said they would not use social media or instant messaging channels for medical communication if their doctors offered it (Healthcare IT News March 24 2011) Consumers Think Social Media May Impact Their Medical Decisions Americans think highly of the usability of social media but are tempered in crowning it the premiere source of health care information when considering all options 25 of respondents said social media was likely to impact future health care decisions 32 said they had a high level of trust in social media sites Only 75 said they had

very low trust 50 preferred heath provider websites to any other source 14 preferred combining

hospital websites and social media Just 3 preferred only social media Those with a household income of $75000 or above were more likely than lesser

31TOC

nline Social Networks Can Help People Make Healthier

onsumers 50+ are the fastest growing segment on social media sites This

r and

PatientsLikeMecom Lets patients share symptoms and treatments with each other

their childrens immunization and

ocial pressure has been shown to help people make healthier lifestyle choices

aregivers See Big Benefits From Information Technology

he National Alliance for Caregiving and United Healthcare survey found that

77 would save time

ease feelings of being effective

aregiver interest in specific applications include

Personal Health Record - 77 would use to track health history symptoms

electronic calendar for scheduling of tasks

on reminders alerts dispensing and

ant to send data like blood sugar or blood pressure

sed devices to aid in fitness and mental

61 want Telepresence to see who they are speaking with and

earners to look to social media sites for health information OLifestyle Choices Cdemographic is increasingly seeking and sharing health info because of the correlation between age and chronic conditions In addition to Facebook TwitteYouTube online patient communities include

80000 members incl 10000 public profiles Basis Tracks biometric data via a Bluetooth watch MotherKnowscom Allows parents to track and share

medical history plus growth chart and developmental milestones S C Tcaregiverrsquos anticipated benefits from the use of information technology included

76making caregiving easier logistically 75 make the patient feel safer 74incr

and 74 stress reduction C

medications and test results in a PHR

Caregiving Coordination - 70 a master and appointments for multiple care givers

Medication Support - 70 would use medicatiadministration directions

Patient Monitoring - 70 wreadings to a doctor or care manager

Interactive Games - 62 want a TV-baconditioning

Videophone -

32TOC

Smartphone - 69 thing smart phone apps could be helpful

OVERSIGHT amp INFLUENCE

Oversight continues to tighten in the face of new health delivery models - this could be counter productive to modernization and drive cost up

Need For Home Care Requires Face To Face Consultations ndash Could Drive Costs Up ldquoOnly after the physician visits and has a face-to-face encounter with potential patientsrdquo ndash is the hallmark of new CMS regulations for physicians continuing the need for home health care under Medicare These regulations were delayed due to serious concerns about physicians readiness to comply and the impact that the requirement will have on severely ill patients Given that physicians are not compensated for travel time to see homebound patients theyre more likely to choose the easier and more costly route - keep patients in the hospital or refer them to another institutional care setting (The Hill April 4 2011) IRS Tax Exempt Hospital And ACOs Briefing The Internal Revenue Service (IRS) indicated that it is considering how existing tax exemption applies to tax-exempt hospitals that will be participating in the Medicare Shared Savings Program (MSSP) through accountable care organizations (ACOs) The IRS recognizes that the promotion of health has long been recognized as a charitable purpose but it then goes on to quote several authorities indicating that promotion of health alone does not ensure tax-exemption (The National Law Review April 27 2011) If yoursquove read this far then we have been successful in giving you some value Please reciprocate and let me know your thoughts or if you donrsquot see something that you would like to then just drop a line to - jimiagco ndash thank you Jim Bloedau Managing Partner Information Advantage Group

33TOC

32TOC

Smartphone - 69 thing smart phone apps could be helpful

OVERSIGHT amp INFLUENCE

Oversight continues to tighten in the face of new health delivery models - this could be counter productive to modernization and drive cost up

Need For Home Care Requires Face To Face Consultations ndash Could Drive Costs Up ldquoOnly after the physician visits and has a face-to-face encounter with potential patientsrdquo ndash is the hallmark of new CMS regulations for physicians continuing the need for home health care under Medicare These regulations were delayed due to serious concerns about physicians readiness to comply and the impact that the requirement will have on severely ill patients Given that physicians are not compensated for travel time to see homebound patients theyre more likely to choose the easier and more costly route - keep patients in the hospital or refer them to another institutional care setting (The Hill April 4 2011) IRS Tax Exempt Hospital And ACOs Briefing The Internal Revenue Service (IRS) indicated that it is considering how existing tax exemption applies to tax-exempt hospitals that will be participating in the Medicare Shared Savings Program (MSSP) through accountable care organizations (ACOs) The IRS recognizes that the promotion of health has long been recognized as a charitable purpose but it then goes on to quote several authorities indicating that promotion of health alone does not ensure tax-exemption (The National Law Review April 27 2011) If yoursquove read this far then we have been successful in giving you some value Please reciprocate and let me know your thoughts or if you donrsquot see something that you would like to then just drop a line to - jimiagco ndash thank you Jim Bloedau Managing Partner Information Advantage Group

33TOC

OVERSIGHT amp INFLUENCE

Oversight continues to tighten in the face of new health delivery models - this could be counter productive to modernization and drive cost up

Need For Home Care Requires Face To Face Consultations ndash Could Drive Costs Up ldquoOnly after the physician visits and has a face-to-face encounter with potential patientsrdquo ndash is the hallmark of new CMS regulations for physicians continuing the need for home health care under Medicare These regulations were delayed due to serious concerns about physicians readiness to comply and the impact that the requirement will have on severely ill patients Given that physicians are not compensated for travel time to see homebound patients theyre more likely to choose the easier and more costly route - keep patients in the hospital or refer them to another institutional care setting (The Hill April 4 2011) IRS Tax Exempt Hospital And ACOs Briefing The Internal Revenue Service (IRS) indicated that it is considering how existing tax exemption applies to tax-exempt hospitals that will be participating in the Medicare Shared Savings Program (MSSP) through accountable care organizations (ACOs) The IRS recognizes that the promotion of health has long been recognized as a charitable purpose but it then goes on to quote several authorities indicating that promotion of health alone does not ensure tax-exemption (The National Law Review April 27 2011) If yoursquove read this far then we have been successful in giving you some value Please reciprocate and let me know your thoughts or if you donrsquot see something that you would like to then just drop a line to - jimiagco ndash thank you Jim Bloedau Managing Partner Information Advantage Group

33TOC