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AHA: Anthem-Cigna merger would hurt move to value-based reimbursement

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The American Hospital Association (AHA) is urging a federal appeals court to uphold a district court decision that has blocked Anthem’s proposed $54 billion acquisition of Cigna.

The organization asserted that the combined company would reduce innovation in the health-insurance market when it’s most needed to continue shifting healthcare away from the fee-for-service model toward value-based care.

“Anthem has been less willing than Cigna to innovate and develop value-based reimbursement systems,” the AHA wrote.

Anthem has said that it is “committed to completing this value-creating merger either through a successful appeal or through settlement with the new leadership at the Department of Justice.”

However, the AHA contended that value-based reimbursement models “depend critically on the willingness of payers to experiment, innovate, and collaborate with hospitals and physicians to develop new payment methodologies that go beyond the old fee-for-service system.” And there is “substantial evidence that underscores Cigna’s particular reliance {as opposed to Anthem’s} ‘upon innovation to compete,’” the AHA added.

AHA’s brief comes days after the Department of Justice, several states and the District of Columbia also urged the appeals court to maintain the lower court’s blocking of the agreement. There is “overwhelming evidence – uncontested by Anthem on appeal” that the merger would raise prices to consumers and shrink innovation among insurers, and that “showed Anthem had no real plan to achieve” the medical-cost savings it asserted that the combined company would create.

To read the AHA’s argument please hit this link.

 

 


Video/text: Tips on becoming physician leaders

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The material below caught our eye because Cambridge Management Group  over the past three decades has helped to develop physicians all over America to be leaders in aligning the clinical missions and fiscal/administrative obligations of healthcare institutions.

Cheryl Pegus, M.D., director of the Division of General Internal Medicine and Clinical Innovation at New York University (NYU) Langone Medical Center,  in this video and text gave Medscape her views on developing physician leaders. Among her observations:

“If you look at healthcare organizations and associations, only a few of them are led by physicians. The healthcare environment has changed, however, and physician expertise and leadership are required.”

“Many physicians start their careers knowing that they’d like to take leadership roles. These are people who we see getting combined MD/MBA or MD/MPH degrees. There are those who are within their career and decide to go back to school, so they go to graduate medical education programs or take specialized courses being offered throughout the country. These are important programs. They are necessary to add skills and are very important as we look at the future of physician leadership.”

“Here are some tips for those who are thinking of physician leadership roles:

  • “Go ahead and get the training and additional education. You’ll learn a lot about predictive modeling, data analytics, reimbursement, clinical trials, regulation, and the roles of different people on a team that are necessary for success and improving clinical care.”
  • “Join organizations or associations that allow you to see the work of colleagues whom you will need going forward.’’
  • “Find a good mentor—someone who can not only provide advice and guidance but also constructive criticism…. You can develop your network today, and it can be a network that supports you throughout your career.’’
  • “Learn how to collaborate and lead as a team. … As a physician leader, it is important that you not think of you, the individual, but think of the important role that every member of the team brings to the table. You will find that you’re able to not only innovate and implement faster, but your execution will really exemplify the diversity of the team that you’ve brought together.’’
  • Never forget that you’re a physician. … As physician leaders become more important in a value-based reimbursement world, we should celebrate and support the physicians who are willing to step up to those roles.’’

To read and hear all her comments, please his this link.

 


Update on disruption in primary care

 

Lisa Ward, writing in Modern Healthcare, discusses the current (and sometimes hyped) “disruptive innovation” in primary care.

One example:

Retail clinics have been promoted as  a potentially disruptive innovation in healthcare that could cut overall healthcare costs.

She notes that  “the hope was that retail clinics could provide a cheaper model of healthcare to more people, especially lower income patients who often forgo preventive care and rely on emergency rooms.

“Yet that isn’t how it turned out. The potential of retail clinics hasn’t been fully realized. They are usually located in more affluent areas and their growth has plateaued. ”

But, more hopefully, she discusses

“{A} raft of new entrants like CareMore HealthPlan, Oak Street Health, IoraHealth and Aledade Inc., which, while using some of the same process-based methods championed by retail clinics, are partnering or employing primary care practitioners in a city or region. These firms are focused on coupling primary care with intensive preventive care to halt or reverse the development of chronic diseases like diabetes, heart disease and chronic obstructive pulmonary disease.

“In a world moving to value-based reimbursement, the strategy makes a lot of sense, especially because this new primary care model tends to use capitated payments, rather than traditional fee for service. They take responsibility for the financial cost of patients’ primary, specialty, acute, and post-acute care and the overall quality of clinical care with the understanding that they will be rewarded for providing better outcomes at a lower cost.

“Not surprisingly, large healthcare organizations, which are increasingly using capitated or bundled payments, are starting to pay close attention to the model.”

To read her entire article, please hit his link.


Warning to labs: Shift to value-based payments faster than expected

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 Bundles News reports on the faster than expected move from fee for service  to fee for value. The publication says that nearly a third of  Medicare payments involve value-based reimbursement and other alternative payment values.
The publication reports:

Clinical laboratory executives should take note of a key financial fact. The transition from fee-for-service healthcare to value-based reimbursement is occurring at a faster clip than theDepartment of Health and Human Services (HHS) anticipated last year when federal officials announced a plan to tie 30 percent of traditional Medicare spending to alternative payments models by the end of 2016.

“That means the transition away from fee-for-service payment for medical laboratory tests and other healthcare services is moving ahead of schedule. As evidence, HHS recently announced it reached the 30 percent target at the start of 2016, nearly a year ahead of the schedule laid out when the Obama administration outlined a plan to reward healthcare providers based on quality of care rather than the volume of services they provide.”

“The 30 percent milestone represents an estimated 10 million Medicare patients receiving value-based care.”

Bundles News says that “the faster-than-expected shift to alternative payment models and value-based reimbursement should serve as a wake-up call to pathologists and clinical laboratory executives who soon may find that fee-for-service reimbursement is no longer the primary payment method for anatomic pathology services and medical laboratory tests.”


Study deconstructs physician-generated hospital revenue

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Despite the recent growth of value-based reimbursement,  the average net revenue each physician generates for his or her hospital rose 7.7 percent, to $1,560,688 at the start of 2016 from $1,448,458 in 2013, says a new report from physician-search firm Merritt Hawkins.

“The 2016 survey suggests that emerging global/value-based payments have yet to reduce the revenue-generating power of physician specialists,” the report stated. The fee-for-service model remains overwhelmingly dominant. It has helped make the U.S. healthcare system by far the world’s most expensive.

The money involved included net inpatient and outpatient revenue derived from patient referrals, tests, prescriptions and procedures performed or ordered in the hospital.

Medscape summarized part of the report:

“Four types of procedural specialists — orthopedic surgeons, invasive cardiologists, neurological surgeons, and general surgeons — all generated more than $2 million a year in net revenue for their hospitals in 2016….At the top were orthopedic surgeons, who generated an average of $2,746,605 on behalf of their affiliated hospitals, which is up slightly from the 2013 figure.”

“Just behind the orthopedic surgeons were invasive cardiologists, who generated an average net revenue of $2,448,136 in 2016, compared with $2,169,643 in 2013. Neurosurgeons racked up an average net of $2,445,810, which is a big jump from $1,684,523 in 2013. …General surgeons contributed $2,169,673, which is a marked increase from $1,860,566 in 2013.”

But net revenue generated by primary-care physicians  fell 10.5 percent from 2013. Hospital revenue from family practices dropped more than 38 percent  and from pediatricians more than 18 percent.

However, general internists’ contribution to hospital net revenue stayed virtually unchanged.

Merritt Hawkins said that the decline in primary-care physicians’ contributions to revenue “may be a result of risk-bearing reimbursement models, where primary-care physicians and their employers are penalized for exceeding budgets.”

 


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