Why you should care about United and claims adjudication

UnitedHealth just released some information about its new real-time claims adjudication today. Now, real-time auto-adjudication software has been around for quite a while. What makes United's announcement a Big Deal(tm)? While some insurers allow providers to submit claims online through a rather clunky interface, United has taken things a step further and made their system both user-friendly and responsive. This is, of course, assuming that the new software works as advertised; and it's worth noting that United has been known to go to market without a product in the past. You may remember the following quote from the article which was the topic of my 4/6 post:

Patients must assiduously document their out-of-pocket payments to assure that coverage kicks in once the deductible is met. For doctors, [Consumer Driven Health Care] means collecting fees directly from patients, many of them unable to pay, a task even costlier than billing insurers.

Although I still maintain that the administrative burden is no higher on doctors for patients with an Health Savings Account-compatible High-Deductible Health Plan (HSA/HDHP) than on doctors whose patients have a more traditional PPO plan with a deductible, I do agree that collecting fees is an issue for physicians. For that reason, I believe that CDH is the driving force behind United's (one of the largest CDH providers in the country) move. United chartered Exante Bank in 2002 as part of its efforts to provide an end-to-end CDH solution to its customers. One of its many projects is OnePay, in which Exante establishes a line of credit that is used to pay the member's portion of the cost of treatment. These are then consolidated into a single statement that can be paid directly from a Health Savings Account (HSA), Health Reimbursement Arrangement (HRA) or other account. In the event that a member can't pay the bill immediately, United will deduct monthly payments from his or her paycheck. I have to assume that the adjudication software will be incorporated into OnePay. Depending on how the system is implemented, it might just cause a major shift in provider expectations around the claims process. In other words, OnePay, or something similar from an insurer that licenses technology from United, could be coming to a provider near you in the not-so-distant future.

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As an addendum to yesterday's post, an article published in Health Affairs examines whether P4P might actually increase the disparity between the care received by the poor and the rich. This gap is not news, of course; the poor have historically been unable to afford proper care, and even now the only guarantee is that hospitals will not let you die. Even Medicaid doesn't really help when physicians refuse to see Medicaid patients due to low reimbursement rates.

The article cites five possible mechanisms: reduction in income for physicians in poor minority communities, culture-blind programs, "teaching to the test," physicians avoiding patients perceived as likely to lower quality scores, and patients' ability to use public quality reports. Obviously, a some of these mechanisms are linked, and some are more persuasive than others. For example, culture-blind programs, particularly those with materials written at a level (or in a language) that some find confusing, could easily lead to a perception that members of some groups are likely to lower quality scores, but I can't agree that a physician is any less likely to fail to explain a treatment regimen to an individual whose primary language is not English given the existence of a P4P program than would normally be the case. Further, I would argue a) that a properly-designed program takes into account clinical outcomes and so would not reward "teaching to the test" and b) that, in the case of a physician who was inclined to ignore such a large part of his or her job, providing the minimum recommended care in such a situation might be an improvement over the care he or she might usually provide.

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Wellmark's P4P program: Collaboration on Quality

Wellmark has begun enrolling physicians in a pay-for-performance (P4P) program covering diabetes and hypertension care, as well as generic drug substitution, in Iowa and South Dakota. I may write a brief history of P4P at some point, but for now it should be sufficient to note that P4P has been around for years now. The idea is simple: pay physicians whose patients receive care appropriate for their condition, where "appropriate" is defined by a standards body or the organization cutting the checks. I realize it may seem odd to most, but the interesting part of the Wellmark program is that it also takes into account clinical outcomes rather than just procedure.

The key to Wellmark's program, and what makes it different from the Regence plan in Washington, is its sharing of medical information between Wellmark and participating physicians, Andringa said. By doing this, it uses both clinical data, which measures how often procedures or tests were performed, as well as outcomes data that indicates how patients' health improved.

Clinical outcomes have historically been very difficult to track outside of large, integrated group practices. Insurers generally only have claims data or separate reporting from which to work, blunt instruments at best, while independent standards bodies are fortunate to have workable data at all. Enter MDatacor, Wellmark's partner in this endeavour and the maintainer of the database to which participating physicians will contribute and which will allow for the type of analysis required to bring clinical outcomes into the payment equation.

Of course, much like Consumer-Driven Health Care (CDHC), the goal of P4P is behavior modification with the end result of lower medical cost trends. Also much like CDHC, however, very little is known about the impact of P4P on very relevant issues such as clinical outcomes. Due to the data collection issues mentioned above, data is often only available on the specific measures used to set reward amounts which means we mostly know that P4P increases physician compliance with standards to some degree. Even then, despite the fact that the maximum payment is roughly 10% of the average physician's annual income, the bar for success is set very low:

Andringa said the program has already "raised the bar" of care by improving both the number of people receiving recommended tests as well as measures of their medical outcomes. In 2005, for instance, just 18 percent of Wellmark-covered diabetic patients had received all four recommended annual tests; in 2006 that average increased to 23 percent.

It's also worth mentioning that not all physicians are happy about P4P initiatives in general. While the income boost is often appreciated, other carriers have been using the data gathered to exclude providers from their PPO networks. Wellmark has pledged not to do that, but is discussing offering discounts to members who choose to use high-performing providers.

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VA and Electronic Medical Records

I find the type of mistake that resulted in the lawsuit filed against the Veteran's Administration last week puzzling given that the VA has had Electronic Medical Record software since 1999. For those who aren't familiar with the concept, an April 10 Washington Post article gives a very good description of the problems EMRs were intended to solve.

In the popular mind, the chief deficit in medical records is legible handwriting. But that doesn't begin to describe the problem.

Many hospitals have multiple paper charts for each patient -- one for hospital stays, another for clinic visits and others for specialty services such as physical therapy. Information is passed via carbons, faxes and letters.

The charts themselves are often maddening arrays of paper held together with metal tabs and wheeled in groups by shopping cart from file room to consultation room. (Before the VA got its electronic system, only 60 percent of patients' charts could be found on any given visit.) Looking at X-rays and imaging scans is equally inconvenient and unpredictable, requiring trips to a film library and luck that the right folder can be retrieved.

The article also goes on to mention that ultimate demonstration of the power of the EMR: disaster recovery as demonstrated after Hurricane Katrina. Given that EMRs can literally be lifesavers, why are only 10% of providers and 5% of hospitals taking advantage of even a limited subset of features?

There are two major reasons. First, surveys from a variety of groups suggest that patients don't trust computers to keep their health information secure. Frankly, living as we do when identity theft is an ever-present worry, it's difficult to blame anyone for being concerned; the VA alone "has investigated 20 complaints of security breaches [in the last 2.5 years], [s]eventeen...[cases of] patient records [being] accessed by unauthorized people, and three...[of] release of medical data to third parties without patient consent."

The much more significant reason, however, is that providers outside of large group practices simply aren't organized enough and don't have the resources required to implement a real EMR.

While EMRs are, at best, rare, more and more people have access to Personal Health Records through their insurers or employers. These pieces of software have nowhere near the functionality of EMRs. The key distinction is that EMRs are maintained by providers and are intended to take the place of paper medical records. PHRs, however, are either maintained solely by the individual or are fed by claims data; details can generally be entered by the individual, but otherwise only a list of visits and, in some cases, prescriptions and lab results can be viewed. They also do not offer the same opportunities to improve patient safety by making it impossible for a busy doctor to, for example, prescribe a medication to an allergic patient.

Of course, as the VA lawsuit demonstrates, medical errors will happen no matter what technology is in use, and lack of functionality is no reason to choose not to use a PHR. I just think that the distinction is an important one, particularly as health insurance carriers like Aetna tout their PHR functionality as a major selling point.

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Sally Satel on Jon Cohn's "Sick"

Jonathan Cohn, senior editor at The New Republic, has released a book entitled Sick: The Untold Story of America’s Health Care Crisis — and the People Who Pay the Price (Newsweek article, reviews: NYT). I plan to read the book when it's out, but I thought it worthy of a brief mention partly due to its content and partly due to the characterization of its content in the media. From the NYT review:

The timing of this book is perfect. An epidemic of anxiety over the cost of health care has catapulted reform back onto the national agenda, and states from California to Massachusetts are now experimenting with universal coverage. It also promises to be a key issue in the 2008 election.

The reviewer, Sally Satel, is the author of several books that should make her own personal beliefs rather clear. Cohn, on the other hand, is a somewhat less-than-outspoken proponent of universal health care. I found the following passage in Satel's review somewhat surprising:

“Sick” does not offer a prescription for our ailing health care system, but it does include a closing chapter on what to do. Here the argument turns tendentious....[Cohn] sweepingly denounces “the principles of modern conservatism” for being “conspicuously short on ... comfort or hope.” In truth, there is nothing inherently pessimistic in choice, self-reliance or limited bureaucracy — the values that underlie a market-based proposal like the one introduced by Senator Ron Wyden, an Oregon Democrat. (Wyden’s proposal also offers subsidies for the unemployed.)

Tendentious? Really? Tendentious arguments are generally characterized by an unreasonable refusal to acknowledge that the bulk of evidence is not one's favor or that evidence that would tend to mitigate against one's conclusions exists, but in his April 1 NYT Magazine article, he acknowledges that "the data on medical outcomes are notoriously uneven and hard to interpret." He also describes, without rancor, Senator Wyden's proposal in reasonable detail given the venue. Given the date of his article, perhaps he was just playing an April Fools prank.

Satel also goes out of her way to characterize the content of his book in a manner with which I doubt Cohn would agree. For example, she minimizes the indictment of the health insurance industry:

By the end of Cohn’s narrative we’ve run the gamut of woes: the hopeless fragmentation of the mental heath system; staggering medical debt; the dependence on job-based insurance; frayed social safety nets; lousy (or no) guarantees of preventive care; selective access to medications. Lack of insurance is a meaningful problem, too, especially for the mentally ill. But since 80 percent of all emergency room visits in 2004 were made by people who had at least some form of coverage, the problem can’t be pinned solely on insurance.

The hand-picked subjects in “Sick” don’t reflect the full range of causes for so much poor health in this country, many of them rooted in inertia: not watching one’s diet or exercising, drinking to excess, smoking. Cohn’s victims are in almost every instance hardworking, conscientious people blocked at every turn by a dysfunctional system.

Note the approach. First, despite the fact that at least two of the "woes" mentioned in the first paragraph (i.e. "lousy...guarantees of preventive care" and "selective access to medications") can be directly attributed to health insurance, the fact that "80 percent of all emergency room visits in 2004 were made by people who had at least some form of coverage" somehow exonerates the insurance industry to a degree. Next, Satel characterizes the subjects of "Sick" as "hand-picked" and not representative of the "full range of causes for so much poor health." The implication is that people failing to take responsibility for their health is by far the larger problem.

"Self-reliance" is a hot topic for Satel. She wrote One Nation Under Therapy: How the Helping Culture is Eroding Self-Reliance (summary, reviews: Jack Trotter, Psychiatry Online) in 2005. Given her dim view of Cohn's stance on universal health care as expressed in the final chapter of his book, why does she praise the remaining content? At this point, those in favor of market-based reforms and those in favor of single-payer proposals would agree that there's something wrong with the American health care system; for them, the only remaining issue is how things should change. Books like "Sick" effectively raise all ships equally; they make the case for change, no matter the content of that case, readily accessible to everyone on the fence.

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Health insurance terminology

Basic terms

• Consumer - An individual "consuming" health care resources. This term was made fashionable in 2003/2004 with the introduction of HSA/HDHPs.
  
• Carrier - An insurance carrier. Just to make things confusing, also referred to as "plan provider," not to be confused with "provider" as listed below.
  
• Consumer-Directed Health - Broadly, CDH is the idea that consumers with some "skin in the game" (i.e. they have to spend more than a $15 co-pay to access services beyond preventive care) are more likely to use preventive care services and avoid unnecessary care. The goal of CDH is behavior modification to reduce medical cost trends.
  
• Claim - An insurance term referring to a notification of requested payment for an amount that is based on the terms of the policy.
  
• Dependent - A spouse, child or other person eligible to be added to a subscriber's health insurance.
  
• Life - One person. Generally used in the context of membership reporting (e.g. "Blue Shield of California has 500,000 TriCARE lives").
  
• Network - The panel of physicians contracted to provide services to a health insurer's population.
  
• Payer - The party ultimately responsible for reimbursing providers. Can be a health insurer, the government (for Medicare, TriCARE, SCHIP and Medicaid) or an employer (in the case of a self-funded plan).
  
• Provider - A physician, medical group, facility, or other direct health care provider.
  
• Risk - An insurance term referring to financial liability; an entity taking on risk agrees to reimburse the beneficiary/subscriber for certain costs under specific conditions in exchange for a monthly premium.
  
• Subscriber - The primary health insurance enrollee.
  
• TPA - Third Party Administrators generally do not take on risk and instead process claims for self-funded employers.

Insurance types

• Fee-for-service - See indemnity.
  
• Fully insured - In a fully-insured plan, the health insurer takes on risk in exchange for a monthly premium. The insurer keeps any revenue not spent on health care or other expenses as profit.
  
• HMO - Health Maintenance Organizations use volume-direction to negotiate discounts with a narrow panel of providers, require that members see contracted providers only, and often require that primary care physicians act as gatekeepers to additional care (i.e. they refer members to specialists). Often, HMOs will pay medical groups a "premium" (known as a capitation payments; these medical groups are known as capitated groups) to take on risk for members and manage their care.
  
• Indemnity - Also known as fee-for-service, indemnity plans pay providers per procedure and generally have no network restrictions.
  
• Medicaid - An amalgamation of federal and state programs intended to insure low-income populations.
  
• Medicare - The recently-revamped federal insurance program for seniors. Providers are paid either on a fee-for-service basis or by private insurers through the Medicare Advantage (MA) program. The largest MA insurers are UnitedHealth (through its SecureHorizons brand) and Humana.
  
• POS - Point of Service plans add a third tier of less-expensive physicians to the PPO model.
  
• PPO - Preferred Provider Organizations negotiate contracts with a broad panel of physicians based on volume-direction. Because more physicians are involved, and because PPOs do not require that members only see contracted providers, network discounts are often smaller than for HMOs. PPOs effectively separate providers into two tiers: preferred (contracted) and non-preferred (non-contracted); members pay more to use non-preferred providers.
  
• SCHIP - The State Children's Health Insurance Program is a federally- and state-funded program that provides insurance to uninsured children from poorer families.
  
• Self-funding - A large employer can choose to take on financial risk for its employees' health care. Generally, the employer pays a fee to an insurer or a Third Party Administrator (TPA) to process health care claims, and to provide a network of contracted providers and other services. The benefits of this arrangement are a) that the employer, rather than a health insurer, keeps the money that is not directly spent on health care and b) that self-funded health plans are exempt from state coverage mandates.

April 1-7 Health Care and Insurance News Roundup

Most under-reported stories

• Cheap AIDS drugs for South America - "A South African drug manufacturer has signed an agreement with an international company allowing it to distribute an antiretroviral cheaply in sub-Saharan Africa, the companies said on Wednesday."

Health Insurance

• 4.5 Million Enrolled in Health Savings Account Plans - 4.5 million Americans are covered by lower-premium, high-deductible health insurance plans that are offered in conjunction with health savings accounts (HSAs), a 43 percent increase since last year, a new census released today by America’s Health Insurance Plans (AHIP) found.
  
• The face of Peachcare: Georgia's insurance for kids helps families who get by paycheck to paycheck — or don't. - Georgia's combined Medicaid and SCHIP program may be undergoing significant changes in the coming year.
  
• Universal Healthcare's Dirty Little Secrets - The two Michaels (Tanner and Cannon) weigh in on Universal Health Care in an April 5 opinion piece in the LA Times. The gist of their argument is that universal health care does not guarantee access to health care.
  
• Seattle psychologist sentenced for military health care fraud - "A Seattle psychologist has agreed to pay $510,000 to the federal government and was sentenced Friday to 12 months and one day in prison for defrauding a Defense Department health insurance program."

Health and Health Care

• Elizabeth Edwards, on campaign trail, says she let her family down - I'm personally horrified by some of her comments. I may comment a bit on this story later.
  
• Genetic Mutation Boosts Memory - Potentially enormous implications for genomics.
  
• Hot flashes may be a sign of heart disease - "Using data collected from 27,000 participants involved in the huge federal Women's Health Initiative (WHI) studies, researchers found that women who have lots of bothersome hot flashes or night sweats after menopause tend to have more of the risk factors—including diabetes and high cholesterol—that increase the likelihood of developing heart disease. The analysis also found that the hormone users with the highest risk of heart attack were those older women who continued to have hot flashes after the age of 60 or more than 10 years after the start of menopause."
  
• Indonesia Upsets Flu Vaccine System, Demands Glaxo, Sanofi Pay - "Indonesia is disrupting the 50-year-old system that supplies the world with flu vaccines by demanding compensation from drugmakers GlaxoSmithKline Plc and Novartis AG."
  
• Opportunistic Chlamydia Screening 'Not Underpinned by Sound Evidence' (Forbes, Newswise) - "Population-wide screening programs for chlamydia, the most commonly reported sexually transmitted disease, may not actually work, a Swiss expert contends."
  
• New study shows hormones' risks overstated for some - "In a postscript to a landmark study five years ago that led millions of women to abandon hormones during menopause, a new review suggests the heart risks for this group of women were overstated."
  
• Computers faulted in spotting cancer - "A good mammogram reader may do just as well at spotting cancers without expensive new computer systems often used for a second opinion, a new study suggests."
  
• Strep Vaccine for Kids Cuts Pneumonia Even Among Adults - "Evidence continues to mount that the use of the new pneumococcal conjugate vaccine is sharply reducing the rate of pneumonia in young children -- and even in adults who have never been vaccinated."
  
• New flu strains 'resisting drugs' - "Tamiflu is viewed as the best weapon currently available against a flu pandemic, and is being stockpiled by governments including the UK's. But Japanese researchers found evidence of emerging resistance to Tamiflu, and a second drug Relenza."

Most over-reported stories

• A Mediterranean diet could prevent childhood asthma
  
• NYC eyes circumcision push to fight AIDS
  
• Veteran and his wife file claim for future health care outside the VA, plus damages

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