Leave questions, opinions, and any other medically-related comments below and I will try to get to them Monday night.

Remember, no personal attacks.

How will bundled payments affect the incentives for each of the players in the medical market?

For patients, a change to bundled payments will probably have little effect upon monetary issues or fears. Demand for medical care will increase. With millions of additional patients being added to Medicaid roles, and with government “paying” the costs, there will still be little disincentive for patients to seek comprehensive care. In addition, patients who are forced to purchase insurance through health care reform will want to get something for their money.

Bundled services will obviously benefit the insurers. Otherwise there would be no incentive to move to such a model. For insurers, bundled payments will increase profits. Much of the uncertainty involving payments for medical care disappears with bundled payments. If a patient with a heart attack develops a complication requiring prolonged hospitalization, in the current system the insurers bear the costs of treating that complication. Switch to a bundled payment model and the providers bear the risk of medical complications or outlier patients. Whether a patient is in a hospital for six hours or six months, the payment to the hospital for one diagnosis will be the same. The theory is that the threat of paying for complications will “encourage” hospitals to take steps to avoid those complications. In other words, a threat of financial liability will improve the quality of care. Kind of like suing our way to better health care … and we all know how well that has worked. For now, the point is that bundled payments increase profits for insurers by decreasing uncertainty in the payments that must be made to providers. As providers decrease costs, then the insurers will gradually decrease the bundled payments while gradually increasing the premiums that every person in the United States will be required to pay under health care reform. Profits go up.
Demand for insurance will go up under health care reform because there is a mandate that everyone purchase insurance. Insurers will encourage people to buy into their plans. More subscribers plus relatively fixed costs equals more profits.
The financial risk that insurers fear in the current medical payment model is largely erased by a bundled payment model. While insurers may be forced to accept all patients – even those with pre-existing conditions – bundled payments diffuse the risk that the insurer must accept. Even though some patients may be hospitalized more often than others, the insurers know that they will only have to pay a fixed cost for the hospitalization.
There will also be a decrease in the legal risks to insurance companies with a bundled payment model. Insurers will be less liable for refusing care. They pay the providers one fee and the providers are then forced to decide what care is and is not “necessary.” Also look for our government to create additional legal protections for insurers as health care reform becomes implemented over the next few years.

Probably the largest effect of bundled payments will be felt by providers of medical care.
For providers, bundled payments will create an incentive to provide less care. Currently, extremely ill patients create profit through utilization of costly medical services. More services = more payments. When providers are paid one price for a given diagnosis, regardless of the severity of the illness, then the incentive will be to accept a large bundled payment and provide the least expensive medical care possible. This will happen in several ways.
First, providers will want to make patients look sicker so that the bundled payments will be larger. Bundled payments for a patient suffering from pneumonia will be much more than a bundled payment for a patient with a chest cold. Patients in respiratory failure will command an even higher bundled payment. Therefore, the incentive will be for providers to label patients with serious illnesses in order to receive higher bundled payments. Just like payments for catheter-related sepsis caused a significant decrease in the reported incidence of catheter-related sepsis (but an increase in other types of sepsis), increase in bundled payments for more serious illnesses will cause an increase in the reported incidence of serious illnesses. The problem is that those serious illnesses will get reported to the Medical Information Bureau and will follow a patient for the rest of the patient’s life.
Second, there will be less utilization of costly medical services. Look for invasive procedures to decrease. Providers will start pointing to medical studies saying that such procedures are not proven effective. Costly antibiotics and other costly medications will be off limits. Consultations will be less available.
Third, providers will begin avoiding patients who are more likely to suffer adverse consequences. Ideally, bundled payments will provide appropriate reimbursement for an “average” patient. Healthy patients will utilize less resources and therefore increase profitability for a given bundled payment. Young healthy patients who may need a day or two in the hospital for their pneumonia will be readily admitted as there will be a high likelihood of profitability with the ensuing bundled payment. Pneumonia patients with diabetes or with HIV who will likely need long admissions and expensive medications will become hot potatoes. Community hospitals will find reasons to transfer high utilizers to other facilities. Perhaps they need an endocrinology consultation. Perhaps they need an infectious disease specialist. Bundled payments will create an incentive to avoid treating obese patients, cancer patients, and other patients with chronic diseases. Financial solvency will be difficult to maintain with bundled payments and chronically or seriously ill patients.
Demand for services from providers will increase, since some patients will not be receiving the level of care to which they are currently accustomed. Patients may go from provider to provider trying to get the care that they desire.
I’m not sure how the fear issue will play out with medical providers. In the current system, fear is mitigated by providing more services. However, in a bundled payment system, providing more services will quickly erase profits and may lead to financial insolvency. How will medical providers adapt? My guess is that there will be less services and more studies and medical testimony showing why providing fewer services is within the standard of care. There will also be a backlash against hospitals if patients die because they didn’t receive what was retrospectively deemed to be “necessary” care. I also think that at some point there will be a revolt against regulatory agencies that create guidelines which increase expense without improving outcomes.

Bundled payments will also have several other effects:
First, the system will get gamed. Big time. If insurers are going to make a large bundled payment for a given diagnosis, expect more of those diagnoses to be made. Patients who previously were sent home with “walking pneumonia” will be admitted because admissions for “pneumonia” generate more money. The admission may only be “overnight,” but it will still generate that bundled payment. Outpatient diseases will suddenly require inpatient management – if that inpatient management is what generates the bundled payments.
Second, bundled payments will allow insurers to vilify medical providers. In the current system, insurers are the bad guys when they refuse to authorize or to pay for medical care. By bundling payments, insurers will be able to blame medical providers for not providing more services because those services are included in the bundled payment. Patients will then direct their anger toward providers when the patients don’t get the medical services that they want.
Finally, bundling payments will also cause fighting between providers. How do physician consultants get paid when the hospital receives the bundled payment for the patient’s illness? The pie is only so big and anyone that provides services is going to want a piece. Hospitals are already trying to minimize this problem by purchasing physician medical practices. When physicians are employees and paid by the hospitals, the hospitals get to keep the bundled payments. Otherwise, let the fights begin.
What happens if a patient goes to an emergency department with a pneumonia and needs to be transferred? Who gets the bundled payment? What if a patient is hospitalized for a hip fracture and then develops a pneumonia while in the hospital? Who gets the bundled payment? Will the payments be split? If so, how much? I posed these questions to a friend who works at CMS. Her response was that the providers would have to create agreements regarding payments for services. Of course, providing a prospective division of payments for every possible type of care would be impossible, so the providers will be left fighting over who gets what payments and how much. When providers fight with each other, nothing good happens. Divide and conquer.

Bundling payments will protect insurers, increase insurer profits, and decrease the willingness of providers to care for seriously ill patients. When the only variable for payments from insurers is how many times a diagnosis is made, the diagnoses will be made more frequently and will result in an increase in the number of “bundled” payments.
Bundling payments will also cause rifts between medical providers that will ultimately detract from the medical care provided to patients.

Stay tuned for Part 4 where I discuss solutions that will reduce costs.

Got a posts lined up to auto-publish, but may not be online again for a little while.

Thanks for the patience.

Things in the ol’ emergency department have been busy lately. Lots of people seem to have minor problems that don’t need “emergency” care, but they have nowhere else to turn. I’ve had several patients come in just asking for medicine refills or asking to have their medications switched to something on WalMart’s $4 list. Kind of a difficult position to be in. On one hand, several people have a sentiment not to “feed the bears” because then the “bears” will keep coming back for more prescriptions. On the other hand, what are the patients supposed to do? Sometimes, I wish we could put legislators into the shoes of these patients.

Got behind in some work I needed to do because of emergency department shifts. Planned to catch up on everything yesterday. Woke up and had to drive two kids to school because they missed the bus. Then got home and the house smelled like someone hadn’t flushed the toilet. Went to check the toilets and they were clean. Then went to the basement to check the toilet. Someone had flushed. Unfortunately, the pump in the ejector pit had burned out, causing toilet contents to back up into the basement. Oh, and as a cherry on the top of this sewage sundae, someone also threw out a half-eaten apple in the bathroom garbage can. That apple had turned brown, had partially liquefied, and the non-liquefied portion had grown a white beard. I was going to post a picture, but between the smell in the basement and the looks of that apple, I damn near barfed.
Fortunately, I had a hand pump that I purchased a few months ago the last time that the ejector pump failed. I was able to pump about three gallons of sewage out of the pit and then the ever expanding smelly puddle started to recede.
Removed the old pump. Went to Home Depot to get a new pump and some PVC pipe. Got home. Damn. Forgot a plastic connector to reattach the pump to the sewer line. Drove all the way back to Home Depot for a 83 cent piece of plastic. Bought two of them just in case. Got home and got the new pump installed and working. Took most of the day to do all the cleaning and disinfecting.
So much for getting work done.
Oh, and if one more person says anything similar to “sh*t happens” and then laughs about it thinking they’re witty, they’ll be coughing up teeth … or maybe coughing up a brown bearded apple. I think I’m going to put that into a garbage can in the garage and see if it grows into a Tim Burton character.

The two youngest girls finally got to be in their stage play. They happened to be the best two performers in the show – not that I’m biased or anything. It did my heart good watching them enjoy themselves on stage … all three shows.

Oldest daughter is still having trouble with the bullies at school. In the past few weeks, not only have they gotten her last friend to turn on her, they also spread rumors about a teacher who has been helping her and now the teacher had to go to a private school board meeting to defend herself. I get frustrated watching her get depressed, but I also let her know we’re all there for her. May be filing legal papers against these miscreants.

Son goes to his first wrestling tournament tomorrow. He’s nervous because he gained 5 pounds from last year. Still, he can do 75 pull-ups and 100 pushups a night, so I think he’s ready to put some shoulders to the mat.

While decorating for Christmas, found out that the puppy doesn’t like any type of Christmas decorations. Stuffed animals are violently unstuffed. Garland vomit spots are in several areas of the house.

Found out I’m probably going to need more surgery. Running out of things to cut on in this body. Sucks getting old.

My wife and I try to go out of our way to help others. Over the past month, we both helped a family whose mother was dying from cancer. My wife went to their home and did home medical visits. I helped them fill out medical paperwork and power of attorney papers. The patient died this past week. We got a wonderful thank you note from the family. Totally unexpected, but much appreciated. Little things like that make such a big difference in our lives.

Finally, we went to our kid’s school for a Santa Workshop today. Kids go around to a bunch of tables and pick out all kinds of “low priced” gifts that they can wrap and give to their family members. Low price as in $10 for ratty stuffed animals or cheap costume jewelry. It was like an overpriced rummage sale. And it kind of ticked me off because it had a table just for gifts to “aunts and uncles” with $6 plastic screwdrivers that say “greatest uncle” and $8 ratty reminder boards that say “greatest aunt” on them. All the kids felt obligated to purchase gifts for everyone. Did get to have a lot of fun wrapping everything, though. Not one of them can keep a secret, either. My wife knew all of her gifts within about 10 minutes of our arrival home.

Gotta go, diary. Weigh-ins end at 7AM tomorrow morning, which means I’ll need to stop for an extra large coffee before we get on the road.

If you’re interested, read the tweets here – or meet them at the bar tonight.

OK, everyone, what’s on your mind?

Leave questions, comments, opinions, and any other medically-related comments below and I will get to them on Monday or Tuesday.

Remember, no personal attacks.

How does EMR use affect quality and delivery of health care that you provide? There are a total of about 20 questions and it should take you 2-3 minutes to answer them. The results will be published in a couple of weeks.

If you’d like to provide input, the link is below.

http://www.softwareadvice.com/articles/medical/benefits-of-emr-software-survey-1081611/

Any of you self-righteous attorneys from New Orleans want to post a comment prospectively telling all the hospitals everything that they need to do in order to avoid being sued for an “inadequate response” to this natural disaster? Any experts in disaster preparedness want to chime in?

Anyone?

Bueller?

Bueller?

[crickets]

Yeah. Didn’t think so.

Yet when some patient gets a fleck of dust in their eye from the 120 mile an hour winds after the storm has passed, based on the recent $25 million settlement from Katrina lawsuits, I’m betting that the attorneys will be falling over each other to file lawsuits to retrospectively tell everyone what the hospital did wrong in preventing said speck of dust to become airborne and lodge in the patient’s cornea, though. God forbid that a hospital’s backup generator breaks down. Just sign a check.

While I’m at it …

Any person living east of the Mississippi River is hereby put on notice that a hurricane is coming. You need to take adequate measures to protect yourself from any potential injury or death from the hurricane. This may include moving yourself out of any hospital within 300 miles of the hurricane and relocating yourself in a hospital west of the Mississippi River.

Is that enough to prevent people from suing?

The radiologists like to do real-time readings of xray studies from the emergency department during business hours. Then the radiology tech brings us a report. I tend to look at most of the radiology studies I order regardless of who reads them or when. Many times I have picked up abnormalities that the radiologists have missed … and vice versa.

The new guy doesn’t seem to like the ED physicians very much. Once he called me and berated me for ordering a CT scan of the lumbar spine to rule out a fracture on a patient instead of just doing an MRI. I told him “Fine, change the order.” He couldn’t change the order, though, because he had waited until the CT scan was completed and after he read the study before calling to “discuss” the matter with me. His preliminary interpretations – which are made part of the medical record – include written statements such as “sinus CTs are never an emergency procedure.”

One report I got this week really got me ticked.

A patient comes in with severe dyspnea. She had trouble finishing her sentences without gasping for air. Her blood pressure was good and her heart rate was a little fast. I ordered labs and a portable chest x-ray. I went and looked at the xray and it was fairly normal. Maybe a little CHF, but otherwise good. The report comes back saying “Limited study. Why did you order a portable exam?”

I grabbed the report and walked over to his lair.

Sooo … I got your report. Just wondering … did you examine the patient?
“Did I examine the patient? No.”
“Did you take a history from her?”
“No.”
“Do you know anything about her condition?”
[Cocking his head to the side as if he is now getting annoyed with me] “She’s short of breath.”
“Anything else?”
“No.”
“Then why would you write something like this on the chart?”
He just looked at me.
“Does the reason for a portable film have any bearing whatsoever on your interpretation of the film?”
“Yes. Portable films are more difficult to interpret.”
“Listen to the question. Does the REASON for a portable versus PA/Upright film have any bearing on the interpretation?”
“No.”
“Then please leave the commentary to yourself. OK?”
He just looked at me.
I have him a half smile. “Thanks.”

Next time, I’m going in there with a Rey Mysterio mask on.