Thursday, March 27, 2014

Update: House votes to delay ICD-10 within temporary SGR fix

After a fiery debate on the House floor that nearly ended when Rep. John J. Duncan (R-TN) declared the bill had the requisite two-thirds majority to pass, Rep. Joe Pitts (R-PA) objected to the vote, saying that a quorum was not present.
That appeared to push back a bill that would have created a temporary Sustainable Growth Rate fix and delayed the ICD-10 compliance deadline.
Only, not so fast.
That was at 10:31 am. Then after quickly moving on to debate supporting the independence of Ukraine, and a short recess, at 12:09 pm the House convened and “on motion to suspend the rules and pass the bill Agreed to by voice vote,”according to the House's Office of the Clerk website.
Before ICD-10 is formally delayed and the SGR fix becomes permanent, however, the Senate has to vote on the proposed legislation and President Obama must sign it into law.
During the 40 minutes of debate prior to the House’s first verbal vote, Pitts cited a Heritage Foundation statement saying that a temporary SGR patch was better than a deficit.
“A vote now is a vote against seniors,” Pitts said. “We are not voting for the AMA today. We’re at a deadline and this is the last vote we’ll have. If you vote no, you’re voting against seniors.”
The American Medical Association surprised ICD-10 observers by circulating a statement urging House members to vote down the proposed legislation – without a mention of the code sets at all – because it wants payment stability for its constituency.
Without a fix to the Sustainable Growth Rate formula, Medicare physicians face a 24 percent reimbursement cut beginning April 1. The debated bill, H.R. 4302, introduced by Joseph Pitts (R-Pa.), proposed replacing the reimbursement cut with a 0.5 percent payment update through the end of 2014, and a zero percent payment update for the period of Jan. 1 through March 31, 2015.
Several House members spoke out against the bill, including Sandy Levin (D-MI).
“This bill is very disappointing,” Levin said. “We got this bill just 24 hours ago.”
Levin continued that serious discussion about how to pay for the permanent fix has been lacking and the result is a complicated bill that several Representatives said is a misstep, and one that House members have yet to even understand.
“I challenge any member to come up here and say I have read this bill,” said Rep. Steny Hoyer (D-MD). “None of us know what the substance of this bill is. We do not have the courage to rationally fund that agreement. This is a game unworthy of this institution and the American People.”
The leadership, House Speaker John Boehner (R-OH) and Senate Majority Leader Harry Reid (D–NV), bringing this bill to the floor without most people having had the chance to digest it is what Rep. Nancy Pelosi (D-CA) called a missed opportunity.
“We should be seeking a bill that would permanently fix SGR,” Pelosi said. “This band-aid is the wrong way to go. It doesn't address the underlying problem. We could have done that, we’ve been trying to for 10 years. It’s always something the Republican majority backs away from.”

Revisiting how Christensen’s “disruption innovation” in healthcare means decentralization

By: Jonah Comstock | Mar 26, 2014   

The term “disruptive innovation” has become so much of a buzz word, it’s not uncommon to hear it applied to just about any radical shift in care. But for Harvard Business School professor Clayton Christensen, who invented the term, it has a very particular meaning. Most innovations are “sustaining innovations” — they make an existing product better and cheaper for its existing customers, and allow producers to sell it at a better margin. Disruptive innovations actually drive costs down, but ultimately end up more profitable because they open up the market to customers that didn’t exist before.
At Better Health Boston, a one-day event for healthcare industry stakeholders hosted by McKesson Corporation, Christensen talked about how the idea of disruptive innovation really applies to healthcare — and what the healthcare system needs to do to go forward.
As an example of a disruptive innovation cycle, Christensen talked about the computer business, specifically the move from $2 million mainframes to $200,000 minicomputers to $2,000 personal computers, and finally to $200 smartphones. He pointed out two things: each innovation brought computing technology to a larger segment of the population, and none of the market leaders in any part of the chain was able to stay a market leader in the next part (with the possible exception of Apple).
“[Makers of minicomputers] got no signal that the personal computer mattered to their customers, because it didn’t matter to their customers,” he said. “We started using a PC for simple things and then the tech got better and better and better, until we could solve all our problems with a personal comupter and we didn’t have to buy a mainframe anymore. And the leaders in that space got killed. … It’s not that the market leaders didn’t see it coming. It’s that it made no economic sense.” 
In healthcare, the market already includes all the possible consumers. The way disruptive innovation will happen, he believes, is in the form of decentralization. Rather than just innovating diminishing returns on better and better hospital-based treatment mechanisms, innovation will consist in taking equal or even inferior versions of technology that exists in hospitals and moving it outward — to clinics, retail clinics, and, eventually, the home.
The way that technology enables that shift outward in care is by doing what Christensen calls “commoditizing experience.” As the scope of medical knowledge has increased, doctors have already made a shift from intuitive care, where educated guesses and trial and error came to bear in treating patients, to evidence-based medicine, where doctors devise treatment plans based on what’s worked best historically in patients with the most similar symptoms.
The shift from evidence-based medicine to personalized medicine, where the doctor uses detailed data about a particular patient to devise a highly specific treatment plan, will be the same kind of shift. Each gradation makes diagnosis and treatment easier to teach, allowing more parts of care to scale out from physician specialists to nurse practitioners to patients and families.
Decentralization will also solve what Christensen considers a fundamental business problem for hospitals.
“In a typical hospital, overheads account for 85 to 90 percent of total costs because of the complexity of offering a ‘one size fits none’ offering,” he said. “It turns out there are three different business models inside a hospital, and those three business models are incompatible.”
The diagnostic function of a hospital functions similarly to a consulting firm, he explained, and works best with a fee for service business model. The acute care and surgery functions of a hospital are a process business, like manufacturing or education, and should have an outcomes-based business model. Finally, chronic disease management and patient community-building are facilitated networks, like telecom companies or insurance companies, and they want a membership-based payment model. Decentralization of care would enable each of those businesses to operate more efficiently, with less overhead.
Christensen thinks actual disruptive innovation in healthcare hasn’t really begun yet. But technologies on the horizon — from home health sensors, to telemedicine, to increasingly sophisticated population health management, could start to move that needle.