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2011 Potpourri XXVI

By July 8, 2011Commentary

The American Medical Association released its annual report on how health plans are doing at paying claims.  According to the AMA’s survey, almost 20% of claims were processed incorrectly, which results in billions of dollars spent on unnecessary administrative costs.  Note, however, that the AMA work is done by a firm whose business is doing contract compliance for providers, it therefore has an incentive to find high rates of inaccuracy to justify its business.  The firm defined inaccuracy by how well the amount paid matched the physician “expected” amount.  No attempt was made to understand why the payer did not pay what the provider expected, which could range from payer misloading of fee schedules or contracted amounts to physician misloading of these and a range of other very legitimate adjustments.  In general, payer information systems are in much better shape than physician ones.  There is no reason to trust these results.  Now, lets see the AMA sponsor a study to look at how often physicians abuse and defraud payment systems and perform and order unnecessary services and how much that costs every year.   (AMA Report)

The Lockton Benefit Group released results of a survey indicating that most of its clients believe the federal health reform has increased costs and administrative burdens and 20% said they would consider terminating coverage in 2014.  Following a similar McKinsey survey, and recent releases of reports by the Urban Institute and others saying that more employers would offer coverage in 2014, this has become a heated topic.  If insurance premiums continue to rise at the rate they have recently, and there is no reason to think they won’t, more employers than may want to admit it will look for a way out.  And, as McKinsey pointed out, there is an easy way out–drop the employer-sponsored plan and give employees money to go buy coverage at the exchanges.  Everyone will be looking around seeing who is going to make the first move, and once it starts, a lot of employers may follow.  (Lockton Release)

A study conducted at Northwestern University regarding use of checklists to reduce medical errors in the ICU was published in the American Journal of Respiratory and Critical Care Medicine.  The study had one set of patients for whom the checklist was used without prompting and another for which a staff member prompted the physician to use it and review the items on it.  The use of the checklist alone had no effect on mortality or length of stay compared to pre-intervention patients.  Using a prompted checklist reduced ICU and hospital mortality, reduced length of stay in the ICU and improved other measures of care.  This is a relatively simple intervention which appeared to have a big impact on health outcomes and likely reduced costs significantly.   (Checklist Study)

Research published in Health Affairs finds that contrary to substantial criticism, oncology drugs are approved quickly in the United States and are usually on the market faster than in Europe.  The study compared time for initial approval for active treatment drugs in the period 2003-10.  There were 35 new drugs in this time frame.  All of the drugs that were approved by both agencies were available to patients in the United States first.  Drug companies typically submitted for approval in the US first, but the FDA also took less time than the European regulators to review a drug.  The FDA only rejected three of the drugs but the European regulators had not approved nine additional drugs that FDA did approve.  (Health Affairs Article)

A commentary in the Journal of the American Medical Association discusses the role and effect of patient advocacy groups in regard to evidence-based medicine and health spending.  The commentary points out that while these groups may do valuable work to help patients with specific diseases, they also tend to have an attitude that there should be no limitations on how much is spent on these patients, regardless of the strength of the evidence for particular treatments.  Many have explicitly said evidence can be ignored if the patient or the patient’s doctor wants a treatment.  A particularly egregious example is an autism association that thinks insurers should pay $300,000 for a course of therapy even though there is no real evidence that it works.  This commentary raises an issue that is long overdue for discussion.  These groups have an overweighted influence on public policy because they are the squeaky wheel and everyone else pays the higher premiums that their advocacy causes.   (JAMA Commentary)

Finally, Google has dropped its effort to offer consumers a personal health record.  PHR’s were another supposedly hot trend that lasted about two months.  There undoubtedly is value in offering some consumers and patients the ability to track and compile their health information in one place, but no one has figured out how to make that attractive to a large enough number of people to justify the cost, much less make some money offering the service.  There is usually good reason to be skeptical about highly touted innovations that don’t really provide a good business model, like all the furor now regarding mobile phone and tablet apps.  Google said it simply didn’t get anywhere near the rate of consumer uptake it expected.   (Google Story)

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