mission statement

r s & k consulting, llc specializes in assisting offices with management practices, reviewing customer service practices and negotiation of contracts and other agreements between suppliers, insurance companies and other purveyor services to a business.  the primary focus is with medical practices and the specific needs of managed care agreement negotiation and renegotiation.  with over ten years experience as negotiating contracts for the managed care community, we bring exceptional insights to the negotiations.

vision statement

provide full value services for clients with integrity, efficiency and honesty while enhancing the business so they are more successful.

news

18 november 2010

from an article in healthleaders e-magazine by jeff elliott

sgr fix gets cool industry reception

the controversial sustainable growth rate formula that is slated to ultimately cut physician payments by 25% beginning dec. 1 may be done away with by a new deficit-trimming proposal.

draft recommendations submitted by the obama-appointed, bipartisan national commission on fiscal responsibility and reform are projected trim federal spending across the board by $200.3 billion and reduce the federal deficit by $4 trillion.

the proposal, delivered by commission co-chairs alan simpson, former republican senator from wyoming, and erskine bowles, chief of staff to president clinton, would eliminate the sgr—an action the industry has been calling for—but still lower physician pay incrementally over the next decade, resulting in medicare savings of $10 billion between 2013 and 2015 and an additional $14 billion by 2020.

but the healthcare industry remains wary of any proposal that puts physician pay at risk. "additional provider cuts on top of what has already been outlined in the health reform laws is a big concern," said rick gundling, vice president of healthcare financial practices for the healthcare financial management association. "the handling of the physician payment has been frantic historically at best, so seeking a long-term solution is commendable, but paying for it with additional provider cuts will make serving the communities that much more difficult."

repealing the sgr, or the so-called "doc-fix" portion of the recommendations, would cost $276 billion according to fiscal commission staff estimates. in addition to physician pay cuts, other proposals that were floated to help offset those costs include directing cms to establish a new payment system designed to reduce costs and improve quality beginning in 2015.

additionally, the proposals call for tort reform to cap non-economic and punitive medical malpractice damages and the expansion of the independent payment advisory board—a lightening rod for industry criticism—which gundling noted is one portion of the healthcare reform package that many in congress are  likely to challenge.

if enacted, ipab would have the authority to impose federal cuts in hospital pay for patients covered by medicare and medicaid; raise the ipab's savings target to 1.5% instead of 0.5% in 2015; impose payment reductions even when medicare spending does not exceed price index growth rate; and eliminate the trigger that could de-activate ipab by 2019.

but perhaps the most damaging changes for the industry is the proposal to accelerate the payment cuts to disproportionate share hospitals, home healthcare and medicare advantage plans, which is expected to save about $9 billion. "our members are already planning for cuts in medicare payments from health reform and the continued shift to a value-based payment system from a volume-based one," gundling noted. "the shortened timetable will make it even more difficult to adapt to the changes."

while this ambitious proposal would institute significant industry changes, it's not yet at the forefront of many provider minds. rather, an immediate fix to the looming sgr cuts is generally their top concern, according to anders gilberg, vice president of public and private economic affairs with the medical group management association. further, gilberg noted that as only a draft recommendation, it has a long way to go before it would be voted on by congress.

18 november 2010

from an article in healthleaders e-magazine by philip betbeze

the physician's place in the aco

now that healthcare reform has gone from a concept to a law, big changes are ahead for everyone associated with providing healthcare to americans. but perhaps no other group will need to adapt more than physicians, many of whom fear that their independence will be curtailed and their influence will retreat. coupled with that fear is the belief that patients will suffer as the "art" of medicine is replaced by standardization.

much of that standardization push can be boiled down to a desire by employers and the government to create so-called accountable care organizations, or acos, in the belief that better-organized, standardized care is better care, and that hospitals, physician practices, rehab centers—you name the healthcare organization—will deliver better care if it is coordinated, and if financial penalties or rewards accrue to those organizations producing better outcomes.

but acos largely don't exist yet—at least not in practice—because they haven't yet been fully defined. the aco model is but one of many demonstration projects that the federal government will conduct under the patient protection and affordable care act of 2010, otherwise known as the health reform act. but let's say it's a demonstration project that has a lot of support from those who see current rates of medical inflation as unsustainable.

because the aco has not been fully defined, there is some flexibility in its construction. and some organizations currently control many pieces of the continuum of care that will be essential to constructing the kinds of healthcare organizations policymakers say they want. such health systems, which have been known colloquially as integrated and whose pieces communicate with each other about a single patient's care, have been held up as examples of what government is seeking with acos. but such organizations are rare, chiefly because perverse economic incentives have made their combination economically nonsensical in a fee-for-service payment environment.

acos will include confederations of doctors, specialists, and hospitals working together to administer payments, determine quality and safety benchmarks, measure performance, and distribute shared savings, according to a june 2010 report from the american hospital association. still, as we enter a four-year transition into new payment methodologies on which long-term strategic decisions must be made, organizations are left with making little more than educated guesses about how they might become an aco.

amid all this uncertainty, one thing does seem certain: the physician will play a key part—perhaps the key part—in whether such organizations are ultimately successful at removing waste from the healthcare payment system.

accountability to whom?

before organizations can begin to create acos, they have to realize who such entities are accountable to, says tom enders, managing director of csc's health sector group in new york. at first glance, most believe the aco should be accountable to the patient. after all, that's the person who is trying to get well, and the reason for any action taken in the first place.

"the accountability is not unilateral; it's trilateral, for the management of care across locations and time," he says, explaining that accountability is the responsibility of the provider for sure, but also of the payer and the patient. that said, most of the penalties for noncompliance will accrue to the provider.

in that case, organization is exceedingly important. a legal and management entity must be in place to take on that shared responsibility, with insurance risk being borne by the payer and delivery risk being borne by the caregiver.

at the macro level, there's a tremendous mismatch between the goals of the aco model and the capacity of the ambulatory services needed to keep a chronic population out of the hospital and on a healthier long-term track.

"there is an insufficient supply of primary care that needs to be hammered away not only with physicians but with advanced nursing and other extended primary care professionals," enders says.

to help with that transition, the government has included heavy investment in federally qualified health centers through the health reform act, which is a step in the right direction, enders says. fqhcs are community-based organizations that provide comprehensive primary care and preventive care to underserved and underinsured individuals regardless of their ability to pay.

some hospitals and health systems, especially safety-net hospitals in urban areas, may not own them but at least have informal arrangements with them so that patients can access follow-up care or even routine checkups. those relationships will have to change such that the collaboration happens much earlier in the process, and, if hospitals hope to be the center of the aco, they will have to work to intervene much earlier in patients' lives to cut down on the number of chronic conditions that bring patients to the hospital for acute care. whether that arrangement can be profitable, however, is another matter entirely.

the same could be said for physician practices.

"we recognize that continuing to align ourselves with physicians by employing them and [having] joint ventures in some clinical areas look like good opportunities, but long-term prospects are unclear," says gene diamond, ceo of the northern indiana region at sisters of saint francis health services in mishawaka, in. "is there going to be a payoff? the aco model might really be no better than when it took the form of a managed care bet in the '90s."

with so much uncertainty among the large institutions involved in providing healthcare when it comes to acos, where does that put physicians?

doctors will lead

there are varying opinions about which entity will be the distributor of a bundled payment that could be directed to an aco. in some cases, it will make the most sense for the hospital or health system to be that entity. in others, it might be organizations affiliated with the hospital but not necessarily the hospital itself. it could conceivably be physician practices or other healthcare providers.

"the payment reform modeling in the healthcare reform [law] is probably the sugar that makes the medicine go down," he says. "whether it's bundling or an aco, it provides a currency to work with physicians and other providers for that coordination. absent that currency, we actually mostly have barriers to working cooperatively."

despite the fact that, in some cases, physicians might not directly control how the bundled payment is distributed among the entities responsible for a patient's care, the physician is going to have to be in a key leadership role, says george mayzell, md, mba, who is chief patient care officer at methodist le bonheur healthcare, a seven-hospital system in memphis, tn, which also owns home health centers and a number of outpatient facilities in the area.

"that's the way this will work," he says of the physician's role in the aco. "ultimately, they decide the quality of care and the cost through the mighty pen. if it's an ipa of docs who understand it's about the patient and quality and managing that financial risk, why can't they have the money and bring the other players to the table?" he asks. "it's not about who's calling the meeting—you'll see different models of acos in different communities," he says, mentioning geisinger health system, summa health system, and others as aco leadership.

mayzell says that taking on risk is one way for physicians to fight back against the perception that they cause overutilization and healthcare cost increases because they don't communicate well with each other. that may be unappealing, but the positive part of taking on risk is that "they'll be in charge. lots of physicians don't like the resource accountability, but we have to control healthcare resource use," he says.

"who better than docs? there will be some learning and struggle, but if we're focusing on evidence-based care and measuring that, resources have to be part of that decision-making. overutilization actually provides worse care. physicians have got to take this on."

at methodist, mayzell says one of the biggest challenges to the success of the aco is "who gets the pot of money, because that can make or break how well this works."
locally, he says, methodist's physician hospital organization will likely be the distributor of payments to the variety of stakeholders involved in the aco.

"if you take a pho and you give them the bundled payment, they are in a good position to make sure the payment gets shared fairly," he says. "the interesting thing about the aco is that they're not hospital- or doctor-centric; they're patient-centric."

one of the key pieces, he says, is being able to share medical and financial information across all the constituents so that they can move toward outcomes as the key metric. that's what many payers attempted to do in the 1980s and 1990s with capitation—an annual fee provided to a medical group for taking care of a certain number of patients. it was largely abandoned because most hospitals and physician practices were much less sophisticated than payers in analyzing risk among large groups and lost money under it. however, mayzell believes experience with capitation will prove valuable as physicians and other healthcare organizations progress to acos.

if acos are to succeed where capitation failed, the group needs critical information about outcomes and utilization, he says. that's possible now.

"capitation did some good things. it pushed risk down to the physician level and put them in control, but it didn't give them the information to really manage the patient's care," he says. "when capitation was in vogue, we didn't have the emr capacities we have now. we have better tools, and we're better evolved in financial and clinical integration."

removing variability

many physicians worry that healthcare reform legislation will eliminate patient choice and physician independence. those skeptical of that stance believe that preserving physician "independence" is a red herring and that physicians were thinking more about their own pocketbooks in largely opposing the law. but the truth is, compensation is likely to fall, especially among specialists.

critics have another word for independence: variability—in other words, alternative approaches in how two physicians might treat the same ailment.

variability has been shown to be an enemy of quality and coordination of care, two key principles necessary to cut healthcare costs, they contend.

variability has been both paraded and pilloried under other terms, such as evidence-based medicine, which opponents like to call "cookbook medicine." but that debate has already been settled, as perhaps a majority of experts—physicians themselves—agree that the vast majority of clinical decision-making can, and should, be standardized. whatever your politics, the influence of the rugged individualist physician is likely to be curtailed under the aco model. however, many believe that the influence of physicians as a group will be the key determinant of best practices in patient care.

for instance, ron greeno, md, founder and chief medical officer of cogent healthcare, a brentwood, tn, company that provides hospitalist physicians and programming management to hospitals, says healthcare teams, with the physician at the head but with accountability running from the top of the provider food chain to the bottom, will likely form the backbone of the aco.

greeno says small or solo practices will likely become extinct under an aco model in which physicians have to become risk-bearing entities to some degree. they may be able to stay independent through independent practice associations, for example, but with a payment methodology that pushes people and institutions to take bundled risk and maybe even capitation under the aco structure, physicians will have to belong to some type of organization, he says, further driving the trend toward physician employment by hospitals or companies like cogent. further, the ability of physicians to make care decisions about a wide variety of patients has become more difficult due to the simple fact that physicians simply can't keep best practice information in their head even if they are current on their specialty.

"it's all about standardization if we're going to make hospitals remotely safe or remotely efficient," greeno says. "i've practiced for 30 years and the amount of information available to use in patient decisions has exploded. you can't keep that information in your head. you can keep where to find that information. that's about it."

the expense of healthcare services and, more important, the rate of inflation associated with those services, means physicians have to move toward limiting what they do to those actions that are known to actually work, he says.

as part of an organization that is accountable to its hospital clients for meeting certain cost and quality targets, greeno looks forward to more standardization among physicians. in fact, cogent's business model essentially is bundling, at least as far as medicare reimbursement is concerned. under its business model, the hospital pays cogent in part based on the number of physicians it provides, but a large portion of its compensation comes from how well physicians meet quality and safety targets, and how well they coordinate care with other members of the hospital's medical staff, regardless of whether those doctors, nurses, and ancillaries are employees of the hospital. such metrics are also used to determine individual physician compensation.

"we take the part b dollars that are invested by the hospital in the program and create an incentive model that drives better quality and higher patient satisfaction," he says. "we've essentially been bundling payments, even though no official bundling methodology exists from medicare."

gaps in structures

as acos mature, companies like cogent might become more attractive to hospitals that don't choose to set up accountability with physicians through employment. currently, many hospitals already contract out the hospitalist function because they don't have to deal with the downsides of physician employment but do reap the benefits of standardization driven by a company that has thousands of physicians in a variety of care settings throughout the country. that allows hospitals to take advantage of the current institutional knowledge of many hospital systems without the capital investment required to replicate the complex patient information systems required for care standardization. those same hospitals are realizing that other pieces of the in-hospital physician staff can also be outsourced, such as physicians who take care of patients in the emergency department and so-called intensivists, who take care of patients in the icu.

"the same infrastructure we wrap around a group of hospitalists to improve their performance can easily be applied to docs working in the icu," greeno says. "the average hospital in this country will not be able to staff their icu solely with icu-trained docs. so this service will include some combination of critical care people who will be supplemented with hospitalists. integration between the hospitalist and critical care program not only makes sense in continuum of care, but also makes sense in terms of providing an alternative physician staff model."

with a shortage of physicians in general, greeno says such cross-training will become essential as acos mature. if that takes care of the hospital, however, there's much more work to do on the outpatient side, says csc's enders.

"if we just focus on the high-risk groups to start, among the challenges are the creation or expansion of sites of care that are conveniently located and staffed to make it easy for patients to have access to care," he says.

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