Introduction to Healthcare and Public Health in the US

1. Introduction to Healthcare and Public Health in the US Financing Healthcare (Part 2) Lecture c This material (Comp1_Unit5c) was developed by Oregon Health and Science University, funded by the Department of Health and Human Services, Office of the National Coordinator for Health Information Technology under Award Number [IU24OC000015)].

2. Financing Healthcare (Part 2)Learning Objectives • Describe the revenue cycle and the billing process undertaken by different healthcare enterprises. (Lecture a) • Understand the billing and coding processes, and standard code sets used in the claims process. (Lecture a) • Identify different fee-for-service and episode-of-care reimbursement methodologies used by insurers and healthcare organizations in the claims process. (Lecture a) • Review factors responsible for escalating healthcare expenditures in the United States. (Lecture b) • Discuss methods of controlling rising medical costs. (Lecture c) Introduction to Healthcare and Public Health in the US Financing Healthcare Lecture b Health IT Workforce Curriculum Version 3.0/Spring 2012 2

3. Financing Healthcare (Part 2) • Review some potential methods of controlling rising costs in medicine • Examine the role of health information technology in reducing and limiting costs • Use of electronic health records and evidence based medicine • Clinical decision support • Clinical practice guidelines Introduction to Healthcare and Public Health in the US Financing Healthcare Lecture b Health IT Workforce Curriculum Version 3.0/Spring 2012 3

4. Financing Healthcare (Part 2) • Examine delivery models for reducing healthcare expenditures • Urgent care/retail clinics • Extenders/DNPs • Patient Centered Medical Home • Direct primary care or concierge medicine Introduction to Healthcare and Public Health in the US Financing Healthcare Lecture b Health IT Workforce Curriculum Version 3.0/Spring 2012 4

5. Cost Drivers: Technology • Technology • 50 % total annual expenditures • Devices advance diagnosis and care • Imaging - CT, MRI • Surgery - da Vinci robot • Artificial devices – hips, knees, pacemakers • Procedures treat the untreatable, minimize risk, improve outcomes • Minimally invasive surgery • Angioplasty • New treatments Introduction to Healthcare and Public Health in the US Financing Healthcare Lecture b Health IT Workforce Curriculum Version 3.0/Spring 2012 5

6. Cost Drivers: Utilization • Physician and hospital utilization • Aging • Increasing number >65 y.o. • Increasing cost >65 y.o. • Chronic disease • Diagnostic tests • Management of disease Introduction to Healthcare and Public Health in the US Financing Healthcare Lecture b Health IT Workforce Curriculum Version 3.0/Spring 2012 6

7. Cost Drivers: Administrative Costs and Reimbursement Methods • Administrative Costs • Billing Procedures • Rules • Process • Reimbursement methods • Fee-for-service encourage utilization • Disparities within and among insurance plans Introduction to Healthcare and Public Health in the US Financing Healthcare Lecture b Health IT Workforce Curriculum Version 3.0/Spring 2012 7

8. Cost Drivers: Defensive Medicine & Patient Preference • Defensive medicine • Overutilization of services • Tort reform • Patient preference • Request for specific test or medication • Direct to consumer advertising Introduction to Healthcare and Public Health in the US Financing Healthcare Lecture b Health IT Workforce Curriculum Version 3.0/Spring 2012 8

9. Fixing a Broken System? • Limit available resources • Rationing • Incentives to change utilization • Increase patient cost • Wellness and prevention • Increase in efficiency • Health Information Technology (HIT) • Evidence-based medicine (EBM) • Clinical Practice Guidelines Introduction to Healthcare and Public Health in the US Financing Healthcare Lecture b Health IT Workforce Curriculum Version 3.0/Spring 2012 9

10. Health Information Technology • Health information technology (HIT) • Best chance to lower costs • HITECH • Reward ($$$) for meaningful use of EHR • Facilitates coordination of care • Supports provider • Clinical decision support (CDS) • Clinical practice guidelines/EBM • Shared information (health information exchange) • Error avoidance Introduction to Healthcare and Public Health in the US Financing Healthcare Lecture b Health IT Workforce Curriculum Version 3.0/Spring 2012 10

11. Evidence-based medicine • Evidence-based medicine (EBM) • Systematic review of published research • Clinical practice guidelines • Standard of care • Lower costs • Defensive medicine • Cook book medicine? • Evaluating technology Introduction to Healthcare and Public Health in the US Financing Healthcare Lecture b Health IT Workforce Curriculum Version 3.0/Spring 2012 11

12. The Medical Home • Provides comprehensive medical care • Personal physician = director • Practice team • Collective responsibility • Enhanced access • Same day appointments Introduction to Healthcare and Public Health in the US Financing Healthcare Lecture b Health IT Workforce Curriculum Version 3.0/Spring 2012 12

13. The Medical Home • Coordinated care • Specialists, hospitals • Other organizations • Active patient participation in decision making • Improves quality and safety • Planned coordinated care • EBM, CDS • HIT measure quality performance • Research: 5.6% lower costs Introduction to Healthcare and Public Health in the US Financing Healthcare Lecture b Health IT Workforce Curriculum Version 3.0/Spring 2012 13

14. Concierge Medicine • Also known as direct primary care • Patient pays fee or retainer • Monthly or annual • Receives special service • Enhanced access • Multiple models • Practice size limited • Limited or no insurance billing • Requires patient maintain health insurance for services not covered in the practice Introduction to Healthcare and Public Health in the US Financing Healthcare Lecture b Health IT Workforce Curriculum Version 3.0/Spring 2012 14

15. Concierge Medicine • Typical features • Same day urgent care appointments and next day non-urgent care appointments • 24-hour telephone access • Extended office visits • Preventive care physicals/screenings • E-mail and mobile phone access Introduction to Healthcare and Public Health in the US Financing Healthcare Lecture b Health IT Workforce Curriculum Version 3.0/Spring 2012 15

16. Concierge Medicine • Typical features • Wellness and nutrition planning • Coordination of medical needs during travel • Patient’s home or workplace consultations • Smoking cessation support • Stress reduction counseling • Mental health counseling Introduction to Healthcare and Public Health in the US Financing Healthcare Lecture b Health IT Workforce Curriculum Version 3.0/Spring 2012 16

17. Concierge Medicine • Practice costs lower • Lower staff costs • Fewer patients/fewer administration/fewer nursing • Lower overhead costs • Rent smaller office • Lower utility costs • Perception of improved quality • No difference from traditional primary care Introduction to Healthcare and Public Health in the US Financing Healthcare Lecture b Health IT Workforce Curriculum Version 3.0/Spring 2012 17

18. Concierge Medicine • Challenges • Health insurance for specialty services, high-cost procedures, emergency treatments, and hospitalization. • No data on how model affects overall health care costs • Employers evaluating model for savings • Could exacerbate the shortage of primary care providers Introduction to Healthcare and Public Health in the US Financing Healthcare Lecture b Health IT Workforce Curriculum Version 3.0/Spring 2012 18

19. Alternative Delivery Methods • Urgent Care • Low cost alternative • Incentives to avoid the high cost of the ED • X-ray and lab on site • Extended hours • Retail Clinics • Located in non-traditional provider locations • Pharmacy and large retail locations • Staffed by nurse practitioners and physicians • Minimal laboratory and x-ray services Introduction to Healthcare and Public Health in the US Financing Healthcare Lecture b Health IT Workforce Curriculum Version 3.0/Spring 2012 19

20. Doctor of Nursing Practice • Doctor of Nursing Practice • Graduate trained • Post-graduate training • Certification examination • Work independently • Benefits • Lower cost for professional development • Lower expenditures Introduction to Healthcare and Public Health in the US Financing Healthcare Lecture b Health IT Workforce Curriculum Version 3.0/Spring 2012 20

21. Tort Reform • Tort reform • Frivolous lawsuits • No lawsuits for expected complications • Damage caps • Limit punitive awards • Limit attorney fees • Pain and suffering • Binding arbitration Introduction to Healthcare and Public Health in the US Financing Healthcare Lecture b Health IT Workforce Curriculum Version 3.0/Spring 2012 21

22. Financing Healthcare (Part 2)Summary – Lecture c • Improved efficiency • Health information technology • Evidence-based medicine • Medical home model • Lower costs 5.6% • Comprehensive care • Concierge medicine or direct primary care • Retainer based model of the medical home • Enhanced services • No research to support cost containment Introduction to Healthcare and Public Health in the US Financing Healthcare Lecture b Health IT Workforce Curriculum Version 3.0/Spring 2012 22

23. Financing Healthcare (Part 2)Summary – Lecture c (continued) • Alternate delivery methods • Urgent care & retail clinics • New providers • Tort Reform • Reduction in defensive medicine costs Introduction to Healthcare and Public Health in the US Financing Healthcare Lecture b Health IT Workforce Curriculum Version 3.0/Spring 2012 23

24. Financing Healthcare (Part 2)Summary • Revenue cycle is a unique process. • US has highest per capita national health expenditures and highest national healthcare expenditures as a percentage of GDP in the world. • Challenge is to reduce costs, maintain quality of care, and improve outcomes and accessibility to care. • HIT, EBM, clinical practice guidelines, new primary care models, and urgent care and retail clinics reduce costs. • Tort reform may change providers’ practice patterns. Introduction to Healthcare and Public Health in the US Financing Healthcare Lecture b Health IT Workforce Curriculum Version 3.0/Spring 2012 24

25. Financing Healthcare (Part 2)References – Lecture c References American Academy of Family Physicians (AAFP), American Academy of Pediatrics (AAP), American College of Physicians (ACP), American Osteopathic Association (AOA) 2007 [cited August 1, 2010]. Joint Principles of the Patient-Centered Medical Home available at: http://www.aafp.org/online/etc/medialib/aafp_org/documents/ policy/fed/jointprinciplespcmh0207.Par.0001.File.dat/022107medicalhome.pdf. Last accessed March 22, 2011. Fisher E, Bynum J, Skinner J. The Policy Implications of Variations in Medicare Spending Growth. The Dartmouth Atlas: The Dartmouth Institute for Health Policy and Clinical Practice Center for Health Policy Research, February 27, 2009. [cited 2010 July 31]. Available at: http://www.dartmouthatlas.org/downloads/reports/Policy_Implications_Brief_022709.pdf. Last accessed March 22, 2011.  Fisher E, Goodman D, Skinner J, Bronner K. Health Care Spending, Quality, and Outcomes More Isn’t Always Better. The Dartmouth Atlas: The Dartmouth Institute for Health Policy and Clinical Practice Center for Health Policy Research, February 27, 2009. [cited 2010 July 31]. Available at: http://www.dartmouthatlas.org/downloads/reports/Spending_Brief_022709.pdf Last accessed March 22, 2011. Nelson AR, Costs of Health Care: New Solutions for an Old Problem. The Commonwealth Fund. May 13, 2005 [cited August 3, 2010]. Available from: http://www.commonwealthfund.org/Content/Publications/Commentaries/2005/May/Costs-of-Health-Care--New-Solutions-for-an-Old-Problem.aspx. Last accessed March 22, 2011. Robert Wood Johnson Foundation. Available at: http://www.rwjf.org/. Source for health issue research and health policy. Introduction to Healthcare and Public Health in the US Financing Healthcare Lecture b Health IT Workforce Curriculum Version 3.0/Spring 2012 25

26. Financing Healthcare (Part 2)References – Lecture c References (continued) The Congress of the United States Congressional Budget Office. Washington DC: 2008 [cited July 31, 2010]. Technological Change And The Growth Of Health Care Spending. Available at: http://www.cbo.gov/ftpdocs/89xx/doc8947/01-31-TechHealth.pdf. Last accessed December 12, 2011.  The Hastings Center, Chapter 17 Health Care Costs and Medical Technology in From Birth to Death and Bench to Clinic: The Hastings Center Bioethics Briefing Book for Journalists, Policymakers, and Campaigns, available at: http://www.thehastingscenter.org/uploadedFiles/Publications/Briefing_Book/health%20care%20costs%20chapter.pdf. Accessed December 12, 2011. The Henry J Kaiser Family Foundation. Menlo Park, CA: 2009 [cited 2010 August 1]. Healthcare Costs: A Primer; available from: http://www.kff.org/insurance/ 7670.cfm Key information on health care costs. Last accessed March 22, 2011  The Henry J Kaiser Family Foundation. Menlo Park, CA: 2010 [cited 2010 August 1]. Kaiseredu.org > Cost and Spending > US Healthcare Costs; available from: http://www.kaiseredu.org/index.asp. Provides background information, links to key data and policy information on US healthcare costs. Last accessed March 22, 2011. The Henry J Kaiser Family Foundation. Menlo Park, CA: 2010 [cited 2010 August 1]. Prescription Drug Trends. Available at: http://www.kff.org/rxdrugs/index.cfm Last accessed March 22, 2011.  The Henry J Kaiser Family Foundation. Menlo Park, CA: 2010 [cited 2010 August 1]. The Kaiser Commission on Medicaid and the Uninsured; Uninsured and Untreated: A Look at Uninsured Adults Who Received No Medical Care for Two Years (2010); available at: http://www.kff.org/uninsured/8083.cfm. Last accessed March 22, 2011. Introduction to Healthcare and Public Health in the US Financing Healthcare Lecture b Health IT Workforce Curriculum Version 3.0/Spring 2012 26