Health Literacy Could Reduce Medicare Expenses

By Clara Ritger | Friday, September 13, 2013 | 1:09 p.m.Photo: AP Photo/Anja Niedringhaus

Patients – particularly minorities and those on Medicare – are not actively making decisions about their treatments and procedures because doctor-patient communication is poor, according to a study presented Thursday to MedPAC, the Congressional advisory committee on Medicare.

The result is a greater expense for Medicare and a lack of empowerment among patients.

"Once patients understand the risks and benefits of expensive procedures, they tend to opt for more conservative treatment options," said Rita Redberg, a MedPAC member and professor at the University of California San Francisco School of Medicine.

It's the reason physicians and hospitals are resisting training programs that would teach care providers to include patients in the decision-making process, Redberg said, because they lose money when patients choose less-costly options.

The deliberations of the 17 MedPAC members will be presented as recommendations to Congress and the Department of Health and Human Services.

Improving health literacy, or the ability of patients to understand their health care and make informed decisions, is a stated priority for HHS Secretary Kathleen Sebelius.

It's a priority that could come with significant financial implications for the United States. In 2007, a team of researchers estimated that low health literacy costs the U.S. between $106 and $236 billion annually. A number of factors account for those costs, including a patient's inability to find the best provider, treatment and services for his or her condition. The researchers argue the savings would be enough to insure all of the more than 47 million patients who were uninsured in the U.S. in 2006.

There's room to grow – only 22 percent of Americans are reported to be "proficient" when it comes to their understanding of health care costs and services, according to a U.S. Department of Education study.

Low-income adults are disporportionally affected. Health literacy was lower on average for adults living below the poverty level than those living above, the DOE's 2003 National Assessment of Adult Literacy found. As income increased, so did health literacy.

Racial and ethnic minorities had lower average health literacy scores than White adults, the study showed. Forty-one percent of Hispanic adults and 24 percent of Black adults had below basic levels of health literacy, compared with 9 percent of White adults.

Those numbers complement MedPAC's findings that Hispanic and Black patients report poorer communication with providers than Whites and the 2012 National Healthcare Disparities Report which found that Hispanic and Black patients were less likely to be asked their preferences in treatment decisions.

The health literacy problem also poses a challenge for the success of the Affordable Care Act. Once the exchanges open on Oct. 1, the millions of new patients added to the system in the coming years are expected to have high rates of health illiteracy, as many of them may not have had health insurance before.

How to inform patients – and who to hold accountable for health information – remains controversial. Some MedPAC members argued that health literacy wasn't only the responsibility of the patient, but also the provider, to explain health options in ways patients can understand.

"What if patients were treated with dignity and respect?" said George Miller, a MedPAC member and CEO of CommUnityCare in Austin, Tex. "Maybe then they'd feel empowered."

The consensus among the group was that patient engagement was an important issue that needs to be addressed, but they were unsure how Medicare would play a role.

"Health literacy is a responsibility of the Medicare program in that we should be paying for care that supports shared decision-making," said Mary Naylor, MedPAC member and a professor at the University of Pennsylvania School of Nursing.

But that, commission members said, leaves the question of how MedPAC would measure success, and providing financial incentives for patient-inclusion appeared contentious.

The commission will wrap up its meeting Friday at the Ronald Reagan Building, International Trade Center in the Horizon Ballroom.

http://mobile.nationaljournal.com/congress/health-literacy-could-reduce-medicare-expenses-20130913

Hospital Networks Reject ObamaCare Initiative

By SALLY C. PIPES

 Posted 06:28 PM ET

Nine major hospital networks just decided they'd had enough of being "Pioneers" for ObamaCare.

They withdrew from the health reform law's Pioneer Accountable Care Organization (ACO) initiative, which launched in January 2012 with 32 health systems participating.

These ACOs are supposed to integrate doctors, hospitals and other providers into one seamless network that could "coordinate" care for Medicare patients — and in so doing, eliminate waste and control costs.

But as these nine casualties illustrate, ACOs are going to fail in that mission. Worse, they'll diminish the quality of care that Medicare patients receive.

Nationwide, about 425 private and public ACOs are in operation. These groups have agreed to a new government payment structure that essentially offers bonuses if they keep costs down while still meeting quality-of-care benchmarks.

If the provider groups save money, relative to the Medicare status quo, they can share in the savings with the government. But if they fail to keep costs down, in most cases, their risk of losing money is limited.

The 32 "Pioneer" ACOs can keep a greater share of any savings they generate — but also take on more downside risk. After two full years, successful Pioneers can leave the conventional structure, whereby providers bill Medicare for every procedure they perform, and instead take a flat fee per patient.

The exit of the nine provider groups "really shows a critical cost-containment approach in the Affordable Care Act is running into real problems," according to Harvard health policy professor Robert Blendon.

The Pioneer program was intended to emulate health care systems like the Cleveland Clinic in Ohio, the Mayo Clinic in Minnesota, Utah's Intermountain Health, and Pennsylvania's Geisinger Health System. All have been celebrated for streamlining administrative procedures, efficiently coordinating care among the health providers in their networks, and lowering costs.

But their success is largely the result of their unique business and medical cultures. None of them provides an easy template for creating a national network of ACOs.

Tellingly, these same organizations have refused to become ACOs. In a 2011 letter, the Cleveland Clinic explained its decision not to participate by citing "significant administrative burdens" and noting the law's regulatory red-tape had "little to do with outcomes." The Mayo Clinic and Geisinger made similar arguments.

Health systems have cooled to the ACO concept in part because the federal government is six months behind in providing them the Medicare claims data they need to comply with the rules.

Providers are also concerned about the risks they have to assume to participate. If they don't realize the "savings" that regulators demand, they'll have to just take the loss — regardless of how much time, effort, or expense it takes to treat someone.

The intent is to force ACOs to be more efficient. But this setup gives providers substantial incentives to skimp on medical care.

ACOs could also face new legal liabilities. Last month, the Journal of the American Medical Association (JAMA) published a paper by Harvard professors H. Benjamin Harvey and I. Glenn Cohen warning that patients could potentially sue entire ACOs for medical malpractice by claiming that their "actions or policies prioritized cost savings over patient safety."

Harvey and Cohen also raised the possibility of a "class action suit ... against institutional policies felt to be potentially harmful to patients, such as physician incentives payments" for keeping costs down.

If they're right, then any savings an ACO generates could be eaten up by legal settlements.

The two professors suggest that ACO doctors adhere to "evidence-based medicine" protocols, following the same treatment plan for every similarly situated patient, in order to immunize themselves against lawsuits.

But medical opinions vary widely depending on the patient and circumstances.

For instance, the medical community has debated when to give women mammograms for well over a decade now.

Further, what works well for one patient might not for another. Doctors need to be free to offer personalized treatment rather than worry about whether Medicare will pay for a procedure that isn't part of the standard protocol — or whether they'll be reprimanded for deviating from the norm.

For all this disruption, ACOs are forecast to deliver savings of just $4.9 billion through 2019. That's equivalent to less than 1% of Medicare spending.

Patients should hope that these nine hospital groups are harbingers of many more to reject ObamaCare's ACOs.

• Pipes is president, CEO and Taube Fellow in Health Care Studies at the Pacific Research Institute. Her latest book is "The Cure for ObamaCare" (Encounter 2013).

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MORSTAD: Medicare: Improving lives for 48 years - The Lufkin News: Community

Posted: Monday, July 29, 2013 1:15 am

By TIM MORSTAD/Contributing writer

July 30 marks the 48th anniversary of Medicare, the national health insurance program for Americans 65 and older, signed into law by Texas’ own President Lyndon B. Johnson in 1965 as an amendment to the Social Security Act.

At the signing, President Johnson noted that, “every citizen will be able, in his productive years when he is earning, to insure himself against the ravages of illness in his old age.” Indeed, for nearly half a century, Medicare has lifted millions of older Americans out of poverty and has provided them with a safety net that they have rightly earned.

Today, Medicare provides affordable health coverage to roughly 52 million Americans, allowing them to lead more productive lives. Yet Medicare has reached a critical juncture. According to the Centers for Medicare and Medicaid Services, the Medicare trust fund will be exhausted in 2026. Politicians have used this statistic against millions of Americans who rely on Medicare. If we don’t cut benefits for today’s retirees, they say, benefits will cease to exist for future retirees.

Two years ago, AARP kicked off a national listening initiative, You’ve Earned a Say, to ensure the millions of Americans who pay into Medicare have a voice in the debate over its future. Millions of our members have sent a clear message to Washington: We should not balance the federal budget on the backs of our nation’s seniors.

Due to rising health care costs and changing demographics, Medicare faces real challenges, and we at AARP are tackling these challenges head on. We’ve said that we can reduce costs throughout the health care system, by clamping down on high drug prices, by improving care coordination and the use of technology and by cutting over-testing, waste and fraud. These commonsense solutions will ensure the longevity of Medicare so that seniors can continue to receive the affordable health care they deserve.

It’s important to note that the Affordable Care Act has already extended the life of Medicare by implementing key reforms that will save $500 billion over the next 10 years. From curtailing exorbitant payments to private insurers to cracking down on fraud and abuse, Washington has shown that it can accomplish real savings intelligently and responsibly, without cutting benefits for current or future retirees.

In order to reduce high prescription drug prices, we also must stop pharmaceutical companies from gaming the system. Right now, some brand name drug companies are driving up the cost of health care by entering into agreements with generic drug companies, paying them to delay bringing a competing product to the market. Moreover, Medicare should be allowed to negotiate with pharmaceutical companies for lower drug costs, which isn’t permissible under current law. Allowing Medicare to use the bargaining power of its 52 million beneficiaries to negotiate for lower prescription drug prices, particularly for high-priced brand name drugs, could save money for seniors and reduce the cost of health care.

Improving care coordination is essential to making sure patients receive safe, high-quality care. We can do this by creating systems that better connect doctors and health care facilities and take advantage of advanced information technology. More effective care coordination will also reduce medical errors and  help prevent dangerous, preventable hospital re-admissions while also ensuring patients are getting recommended care and saving taxpayer dollars.

It is estimated that Medicare could save hundreds of billions of dollars by reducing waste and stepping up fraud detection. For example, Medicare currently pays all health claims and then has to chase down providers if an error or fraud is detected — and too often the improper payment is never recovered. By improving technology, we can flag fraudulent claims before they are paid. We can also use technology to crack down on criminals who file false Medicare claims. By removing personalized information from Medicare identification cards, we can develop new cards that can track and confirm that Medicare is being billed for only those services a patient receives.

The proposals we are advocating for are not gimmicks but solutions that will improve and strengthen Medicare today and for future generations. Medicare has been successful for nearly half a century and is still a success today. If Washington takes the necessary steps, Medicare can be strengthened and improved for the next generation of seniors. By doing so, we can, in the words of President Johnson, “reaffirm the greatness of America.”

Tim Morstad helps lead outreach efforts for AARP in Texas.

MORSTAD: Medicare: Improving lives for 48 years - The Lufkin News: Community

Manhattan U.S. Attorney Announces Charges Against Eight Individuals In Connection With $2.3 Million Bribery And Kickback Scheme To Secure Business From A Medical Cost-Management Company

Source- http://www.justice.gov/usao/nys/pressreleases/July13/DharayanetalArrestPR.php

FOR IMMEDIATE RELEASE

Wednesday, July 17, 2013

One Executive Has Pled Guilty to Accepting Bribes and Kickbacks

Preet Bharara, the United States Attorney for the Southern District of New York, Thomas O’Donnell, the Special Agent-in-Charge of the New York Office of the U.S. Department of Health and Human Services, Office of Inspector General (“HHS-OIG”), and Steven G. Hughes, the Special Agent-in-Charge of the New York Office of the U.S. Secret Service today announced charges against eight individuals for their alleged involvement in a lucrative scheme in which information technology vendors paid over $2.3 million in bribes and kickbacks to secure business from executives of a Manhattan-based medical cost management company (the “New York Company”). The defendants charged with paying the bribes and kickbacks are SARVESH DHARAYAN, SANJAY GUPTA, VENKATA ATLURI, RANGARAJAN KUMAR, VADAN KUMAR KOPALLE, and DARREN SIRIANI. The defendants charged with receiving the bribes and kickbacks are ANIL SINGH and KEITH BUSH. DHARAYAN, GUPTA, KOPPALLE, and SIRIANI were arrested this morning at their homes in New Jersey, and were presented in Manhattan federal court this afternoon before U.S. Magistrate Judge James L. Cott. SINGH, who was previously arrested in April 2013, pled guilty to honest services fraud and other charges before U.S. District Judge Denise L. Cote on July 11, 2013. BUSH, who was also arrested previously on July 12, 2013, is next scheduled to appear in court for a pretrial conference on August 15, 2013. ATLURI and KUMAR are not yet in custody.

Manhattan U.S. Attorney Preet Bharara said: “For the eight defendants charged in this multi-million dollar scheme, bribes and kickbacks were allegedly the cost they imposed for doing business with this medical-cost management company. As today’s charges detail, the defendants achieved their years-long fraud through fake companies, sham invoices and made-up consulting services. Today’s actions underscore our commitment to work with our law enforcement partners to bring to justice individuals who break the law out of greed.”

HHS-OIG Special Agent-in-Charge Thomas O’Donnell said: “This scheme was motivated by greed and it deprived its victim, a company in the health care field, of the honest labor of its employees. We will continue to aggressively investigate those who pay kickbacks and bribes to gain an advantage in the public and private health care sectors.”

USSS Special Agent-in-Charge Steven G. Hughes said: “The Secret Service continues to enjoy its partnership with the New York Office of the U.S. Department of Health and Human Services, Office of Inspector General. We find partnerships such as this to be an effective way to share resources and stop criminals from continuing to engage in fraudulent schemes.”

According to the allegations contained in the Complaint, the Informations filed against BUSH and SINGH, and other statements made in Manhattan federal court:

SINGH was employed as a Senior Vice President and the Chief Information Officer at the New York Company, which provided nation-wide medical cost management solutions including, among other things, medical reimbursement services, and BUSH was employed as the company’s Director of Database Administration. SINGH and BUSH had considerable influence over the selection of vendors, specifically vendors of database administrators (“DBAs”), hired by the New York Company.

From 2008 to September 2012, various individuals collectively paid over $2.3 million in money and other benefits to SINGH and BUSH in exchange for SINGH’s and BUSH’s agreement to steer millions of dollars of the New York Company’s DBA business to them. Specifically, as alleged:

• DHARAYAN, the owner of a New Jersey information technology company (“Vendor 1”) and GUPTA, an employee of Vendor 1, paid approximately $1,722,620 in kickbacks and bribes to BUSH and SINGH in exchange for receiving DBA business from the New York Company. From 2010 to 2012, the New York Company paid Vendor 1 approximately $6,625,479.20 for placing DBAs with the New York Company.
• ATLURI, the owner of another New Jersey information technology company (“Vendor 2”), paid approximately $190,436.75 in kickbacks and bribes to BUSH and SINGH in exchange for receiving DBA business from the New York Company. From 2008 to 2012, the New York Company paid Vendor 2 approximately $11,495,804.88 for placing DBAs with the New York Company.
• KUMAR paid approximately $247,634 in kickbacks and bribes to BUSH and SINGH in exchange for their agreement to steer DBA business to another New Jersey information technology company (“Vendor 3”). From 2009 to 2012, the New York Company paid Vendor 3 approximately $2,593,210.38 for placing DBAs with the New York Company.
• KOPALLE, who was in charge of delivery and operations at a Texas information technology company (“Vendor 4”), paid approximately $142,967.50 in kickbacks and bribes to BUSH and SINGH in exchange for receiving DBA business from the New York Company. From 2009 to 2010, the New York Company paid Vendor 4 approximately $1,035,660 for placing DBAs with the New York Company.
• SIRIANI, the owner and operator of another New Jersey information technology company (“Vendor 5”) paid approximately $23,000 to $29,000 in cash kickbacks and bribes to BUSH and SINGH in exchange for receiving business from the New York Company. SIRIANI also paid for hotel rooms in Las Vegas and Costa Rica, deep sea fishing, massages, sports tickets, and other things, all in exchange for receiving business from the New York Company. From 2008 to 2012, the New York Company paid Vendor 5 approximately $1,177,600.91 for various services and products.

According to the Complaint, DHARAYAN, GUPTA, ATLURI, KUMAR, and KOPALLE paid the kickbacks and bribes through conduit companies established by BUSH and SINGH for the very purpose of disguising the true nature and origin of the illegal payments. To further conceal the bribery and kickback scheme, BUSH and SINGH sent false invoices to the conduit companies for consulting services that never occurred. Many of the kickbacks and bribes were paid pursuant to these false invoices.

*                      *                      *

DHARAYAN, 42, of Edison, New Jersey, GUPTA, 38 of East Windsor, New Jersey, ATLURI, 41, of Monmouth Junction, New Jersey, KUMAR, 47, of Monroe, New Jersey, KOPALLE, 43, of Edison, New Jersey, and SIRIANI, 45, of Matawan, New Jersey, were each charged with one count of conspiracy to commit honest services fraud, which carries a maximum term of 20 years in prison, one count of conspiracy to violate the Travel Act, which carries a maximum term of five years in prison, one count of honest services fraud, which carries a maximum term of 20 years in prison, and one count of violating the Travel Act, which carries a maximum term of five years in prison. DHARAYAN, GUPTA, ATLURI, KUMAR, and KOPALLE were also charged with one count of conspiracy to commit money laundering, which carries a maximum term of 20 years in prison.

SINGH, 40, a resident of East Brunswick, New Jersey pled guilty to one count each of conspiracy to commit honest services fraud, conspiracy to violate the Travel Act, honest services fraud, violating the Travel Act, and conspiracy to commit money laundering. He faces a maximum penalty of 70 years in prison on all counts. BUSH, 41, a resident of Rahway, New Jersey, is charged with one count each of conspiracy to commit honest services fraud, conspiracy to violate the Travel Act, honest services fraud, violating the Travel Act, and conspiracy to commit money laundering. He also faces a maximum penalty of 70 years in prison if convicted on all counts.

Mr. Bharara praised the outstanding efforts of HHS-OIG and the U.S. Secret Service in the investigation. He also thanked the New York Company for its assistance and cooperation in the investigation.

This case is being handled by the Office’s Complex Frauds Unit. Assistant U.S. Attorney Jason P. Hernandez is in charge of the prosecution. Assistant U.S. Attorney Christine Magdo of the Office’s Asset Forfeiture Unit is responsible for the forfeiture aspects of the case.

The charges and allegations contained in the Complaint and the Information filed against BUSH are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

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ACOs strike it hot in healthcare

John Andrews, Contributing writer

June 28, 2013

The hottest letters in healthcare right now are A, C and O. And while together they stand for accountable care organization, industry analysts say providers need to look beyond the acronym in their efforts to build a new business model.

Nick Sears, MD, chief medical officer for Atlanta-based MedAssets, understands that there is some confusion and trepidation among provider groups about how to start an ACO. As a veteran observer of industry trends over the past quarter-century, Sears realizes the magnitude of change that is being required of healthcare providers and the daunting task associated with making the necessary modifications.

“At this point, providers shouldn’t worry about what an ACO looks like, but instead focus on the building blocks that go into it,” Sears said. “Although it is part of the Affordable Care Act, which is currently under scrutiny in Congress, the intent of ACOs will continue even if parts of the ACA are stricken. So providers have to identify their risks in the whole value-based purchasing model because if they don’t they are in trouble.”

As the new healthcare model has emerged over the past couple of years, Jeremy Belinski, director of operations at MedAssets, has taken to call ACOs by another acronym – CIO, for clinically integrated organization. The description seems more apt for the machinations of putting groups together, he says.

“As we’ve dug into the process, we’ve found it is easy to form a legal entity, yet each group has its own model for doing things,” Belinski said. “But just because they’ve joined together doesn’t mean they can make it work. Making it operational has been a challenge. They have to get good at managing costs and aligning physicians, which is easier when you’re part of an organization. The challenge is to extend beyond the four walls of the hospital.”

Managing metrics

Ken Perez, director of healthcare policy for Emeryville, Calif.-based MedeAnalytics, has been studying the metrics associated with ACO configuration in both the Medicare and commercial insurance domains, developing a comprehensive report and a series of informative videos on the subject. His research found that ACO metrics can be divided into six categories: pediatric, ambulatory, prevention, acute care, outcomes, and utilization of services.

“As more ACOs become multi-payer, it is increasingly important to understand — for the sake of leverage and organizational alignment — the general themes and commonly used metrics used in ACO agreements,” Perez said. “This strategic understanding will help shape emerging best practices for successful ACOs.”

In discerning between commercial and Medicare ACOs, Perez found that commercial organizations place greater emphasis on areas of integration, pronounced cost reduction and resource utilization while Medicare ACOs are focused more on quality outcomes.

“There is a lot of variability between commercial and Medicare ACOs because of different programs and models and you have to choose what game you’re going to play,” he said. “The end game for the provider has got to be multi-payer, so whether you start with Medicare or commercial, you will have multiple payers, you must leverage costs across the board and implement a standardized level of care.”

The 9 C’s

“Medical Home” is another moniker associated with the ACO concept and while some see them as interchangeable, Tom Doerr, MD, does not. A general internal medicine practitioner who focuses on geriatric patients, Doerr also serves as director of innovation research for St. Louis-based Lumeris.

The difference between the Medical Home blueprint and a true ACO, he says, is that the Medical Home design does not go far enough in determining how care is delivered.

“There are nine key elements to care called the ‘9 C’s’ and the Medical Home only incorporates the first four elements,” Doerr said. “We architect how care is delivered at the physician practice level with workflows, metrics and behavioral strategies to convert to value-based delivery. The first four C’s are part of the primary care model, but they are not new. An accountable primary care model should include all nine elements.”

The 9 C’s as Doerr explains them are as follows: Contact with the healthcare system; Comprehensive care; Continuous care that is longitudinally focused; Care coordination; Credibility and trust with the physician; Collaborative learning between payers and providers; Cost effective care; Capacity expansion through technology; and Career satisfaction.

“Beyond the 9 C’s they need to have the collaborative payer model,” he said. “The collaborative payer model makes the payer an ally of the provider.”

Doerr appreciates the irony in his advocating alliances between two traditional adversaries, but maintains that a cooperative spirit can occur when each side sees mutual benefit.

“The national movement toward ACOs has legs and is gaining traction,” he said. “It is blending the role of payer and physician; both quality and cost. While some still aren’t comfortable with it, as the movement gains momentum, that resistance will drop.”

http://m.physbiztech.com/news/business/acos-turning-heat-healthcare

Profiting From Pain

NEWS ANALYSIS

By BARRY MEIER

Published: June 22, 2013

THE use of narcotic painkillers, or opioids, has boomed over the past decade as drug makers and doctors have promoted them for a new use: treating long-term pain from back injuries, headaches, arthritis and conditions like fibromyalgia. Insurers have also grown to see pills as a cheaper way to treat chronic pain than other methods.

Multimedia

Graphic

The Soaring Cost of the Opioid Economy

Some patients are greatly helped by opioids, a large family of medications. Among the more widely used opioids are oxycodone, which is found in Percocet and OxyContin, and hydrocodone, which is used in Vicodin. Other potent opioids include fentanyl and methadone. Narcotic painkillers are now the most widely prescribed class of medications in the United States, and prescriptions for the strongest opioids, including OxyContin, have increased nearly fourfold over the past decade.

There is increasing evidence, however, that such drugs, along with being widely abused, are often ineffective in treating long-term pain and can have serious consequences, particularly when used in high doses. Along with the risk of addiction, side effects can include psychological dependence, reduced drive, extreme lethargy and sleep apnea.

The economic costs associated with the painkiller boom have also proved enormous, giving rise to a host of unanticipated medical, legal and social costs. Over the past decade, the legal — and illegal — use of these drugs has given birth to new businesses and expanded existing ones. These include urine-screening tests to make sure patients are taking the drugs properly, added sales of addiction treatment drugs, growing emergency-room expenses, law-enforcement budgets and skyrocketing costs for insurers.

In the short run, treating a patient with an opioid like OxyContin, which costs about $6,000 a year, is less expensive than putting a patient through a pain-treatment program that emphasizes physical therapy and behavior modification. But over time, such programs, which run from $15,000 to $25,000, might yield far lower costs.

Here is a brief guide to the economics of opioids.

Barry Meier is a reporter who covers business and medicine for The New York Times and the author of the Times e-book “A World of Hurt: Fixing Pain Medicine’s Biggest Mistake.”

http://www.nytimes.com/2013/06/23/sunday-review/profiting-from-pain.html?ref=health&_r=0

$585 Million to support Destination Medical Center, a Mayo Clinic project...

Mayo Clinic expansion shows local costs of growth

Published 6:11am Saturday, June 22, 2013

ROCHESTER — In the heart of this southeastern Minnesota city, the Mayo Clinic is building a massive radiation treatment facility that’s expected to draw cancer patients from across the country and perhaps around the world.

The development spotlights a difficult issue faced by clinic officials and the state.

The Legislature in May approved $585 million in future taxpayer support for an economic development project called Destination Medical Center. The plan is to make Rochester a more appealing destination not just for people seeking radiation treatments, but also for the many other faraway patients who travel here for care.

Minnesota policymakers are also dabbling with what experts say is a more fundamental dilemma for the nation’s health care system. The state is now looking for Mayo Clinic to dramatically expand the regional economy, just as doctors and hospitals are being asked to rein in runaway health costs.

“If the costs grow less rapidly, so do the jobs,” Mark Pauly, a professor of health care management at the University of Pennsylvania’s Wharton School said of the national dilemma. “From a policy point of view, that hasn’t been reconciled.”

Mayo Clinic officials contend they’re uniquely prepared to simultaneously satisfy both demands.

By providing high-quality, efficient care while expanding operations in Rochester, the clinic plans to survive and prosper even as cost pressures might force other medical centers to shrink, said Dr.

Brad Narr, Mayo Clinic’s medical director for Destination Medical Center.

“I think there are going to be winners and there are going to be people that are going to be left in the dust,” Narr said. “And it’s going to hinge on what we’re actually doing as a medical system that improves people’s lives and provides value.”

Unclear plans

There are still many unanswered questions about Destination Medical Center.

Mayo Clinic officials haven’t said exactly how they will invest the $3.5 billion

they’ve committed to spend over 20 years. It’s also not clear what sort of investment will come from other private parties who are expected to spend up to $2.1 billion.

All told, the project will create about 30,000 jobs, supporters predict, but it’s not clear when that will happen.

State and local taxpayers are being asked to invest in infrastructure projects that could range from land purchases and building demolitions to the construction of a large atrium where Mayo Clinic visitors could escape harsh Minnesota winters.

Next steps include the appointment of board members to a nonprofit economic development corporation for Destination Medical Center and creation by the clinic of a nonprofit economic development agency.

“This (agency) is what will do the legwork — tee the projects up, make it easy for this public funding … to align with the goal of a destination medical center,” Narr said.

He added that it’s “similar to what the city of Anaheim (Calif.) aligned with to make sure that Disneyland came to be what it is.”

Narr isn’t alone in making references to Disney when talking about Destination Medical Center.

“When Disney World was built (in Orlando, Fla.), it was $311 million,” said state Sen. David Senjem, R-Rochester. “If you fast forward and do the inflation calculator, that’s $1.7 billion today.”

“Mayo is saying, ‘We’re going to invest $5.5 billion’ ” combined with other private parties, Senjem said. “By today’s cash values, that’s three Disney Worlds in downtown Rochester.”

Export potential

Such dreams of growth are tantalizing communities across the country. Mayo Clinic’s pitch at the Legislature referred to public funding for economic development projects connected to big-name hospitals and clinics in Baltimore, Cleveland and Houston.

Pittsburgh turned to its health care sector for growth after the demise of the steel industry. Even Detroit has discussed trying to become a medical mecca — a development that caught the attention of researchers at the Center for Studying Health System Change, a health policy group in Washington, D.C.

In 2011, researchers at the center published an article about how localities hope that health care expansions will create high-paying jobs as the population ages. To the extent the projects can draw patients from outside the region — or even the country — health care can serve as an export product that creates local jobs paid for by faraway patients.

But there’s a limit to this export potential, the researchers wrote, because most patients opt for care close to home.

Mayo Clinic is famous for attracting patients from afar. Yet even the clinic draws only 20 percent of its Medicare patients from outside its home base in Minnesota, Iowa and Wisconsin, researchers wrote, and only about 2 percent of surgery patients come from overseas.

Unless regional health care projects draw new patients from afar, expanded services might simply lead to greater use of those services by local patients. Health insurance premiums would go up as a result, researchers wrote, and costs would be shifted to the federal government through Medicare payments for services.

“If all of the costs of increased health spending were financed by local residents, the attractiveness of strategies to expand the health care sector would be diminished,” researchers wrote.

“Health care spending and costs are a big deal, and we need to address them,” said Alwyn Cassil of the Center for Studying Health System Change. “Yet the state hospital associations are constantly putting out reports on the economic benefits that the health industry provides to local economies.

“There’s a huge disconnect there.”

‘Positioned to grow’

At the Mayo Clinic, the plan for growth with Destination Medical Center is focused on drawing patients from outside Minnesota, said Narr, the project’s medical director.

Mayo wants to be a destination for patients seeking second opinions and dealing with “curveballs” that have stumped hometown medical centers, Narr said. The clinic will also maintain expertise, he said, in treating complex medical conditions for which patients need care that’s well-coordinated among different medical specialties.

Mayo Clinic in 2011 launched a subscription service through which hospitals around the country can consult with doctors in Rochester about complicated patient care issues. Currently, 18 medical centers are part of the Mayo Clinic Care Network, which is meant to allow most patients to stay at local hospitals while directing a few to Rochester for advanced care when needed.

With Destination Medical Center, how many more patients might come to Rochester?

In an April interview, Senjem said he was told the Mayo Clinic needs to double its patient base in Rochester to about 600,000 patients per year. Mayo Clinic officials, however, would not comment on the projection or offer specifics about growth plans.

“As the public reporting of outcomes, quality, safety (and) service occurs, we are positioned to grow,” said Karl Oestreich, a clinic spokesman, in a prepared response to questions.

Lowering risks

Over the years, Mayo Clinic has made big investments in reporting systems to gauge health care quality and efficiency, Narr said, and physicians believe the data will help prove their value to patients. With the proof, Mayo Clinic expects to distinguish itself from other hospital and clinic systems and thereby survive whatever consolidation comes to the industry.

The status quo in health care is “bankrupting the nation,” Narr told state legislators in April. The concern helps explain why Mayo Clinic in January announced an agreement with Minnetonka-based health insurance giant UnitedHealth Group for research on getting more value from health care spending.

Mayo Clinic doctors are in a position to focus on efficiency and quality because they are paid salaries, Narr said, rather than collecting fees for each service they provide. Critics of the fee-for-service payment system say it creates an incentive for non-salary doctors to provide unnecessary and wasteful care.

A case in point is prostate cancer surgery. Up until a few years ago, surgical removal of the prostate to treat cancer, Narr said, was the single most common operation performed by Mayo Clinic surgeons in Rochester.

The surgery brings a significant risk of impotence and incontinence for men who undergo the procedure, but Mayo Clinic was at the forefront of improving the operation, Narr said. The high volume of surgeries generated significant revenue for the clinic in the process.

But over time, the clinic and experts across the country started realizing that screening tests were directing far too many men down a path toward surgery when they may not have needed it. Mayo Clinic abruptly changed course.

“We were doing 1,100 (surgeries) per year,” Narr said. “Over the last three years, we’ve gone from 1,100 to 950 to 600. We are doing the ones, I believe, that are indicated right now, and we do them safely and effectively because we’re tracking the outcomes.”

“In smaller areas, what they do with the prostate is between the patient, the doctor and the malpractice attorney — and they’re not tracking those things,” he said. Quality tracking systems that gauge value are “a huge cost to us — it’s part of our big cost infrastructure. But eventually, that’s going to be the norm, and we want to be ready for it.”

Focusing on value

The focus on value is where the U.S. health system needs to go, said Dr. David Goodman, a health policy expert at Dartmouth Medical School.

Mayo Clinic has a reputation for being very efficient in treating Rochester patients covered by Medicare, Goodman said. The clinic’s quality scores for treating Medicare patients also are good, he said.

If Destination Medical Center means the clinic gets bigger so it can provide high-quality, efficient treatment to more patients, that could be good for Rochester and the nation, Goodman said. But the focus needs to remain on value, he said, not jobs.

“Thirty thousand jobs sounds great to the local area,” Goodman said. “But it represents a tremendous amount of money that could be coming out of other health care systems, if they aren’t providing that care, or from employers and the government.”

“Rochester’s gain might be the nation’s loss,” he said, “if there isn’t substantially greater value in the services they’re providing.”

http://www.austindailyherald.com/2013/06/22/mayo-clinic-expansion-shows-local-costs-of-growth/

The Digital Takeover of America’s Health Care System

6/23/2013 – Kameron Gifford, CPC

Eric Schmidt of Google recently pointed out that from the dawn of civilization to 2003 there were a total of 5 exabytes or 1 billion gigabytes of data total. Today, we are producing a minimum of 5 exabytes every 2 days. That is incredible. This powerful explosion into “Big Data” was made possible by advancements in technology such as the smart phone, cloud servers and remarkable biosensors. Consumers have harnessed this technology to drive revolutions in every industry outside of healthcare. The internet allowed a frontier for the convergence of influence and technology capable of altering an entire culture. Could the internet be the one technology that has fundamentally changed the clinical practice of medicine more than any other advancement? Will a new generation of tech savy consumers finally force a transition from population based health into a new era of individualized medicine? Will the next generation of patient-centered care focus on what is best for the individual patient and not big business?
Consider these statistics from 2011:

•   42% of Internet users went online to find health information for self-diagnosis or treatment.
•  38% of users ages 65 and older went online for medical research.
• 48% of Internet users with an annual income over 100,000 used the internet to research information on health plans or practitioners.
• 37% of internet users between the ages 25 and 44 and 35% of users between the ages of 45 and 64 also went online to find information on health plans and physicians.

Powerful indications that the internet does have the ability to engage users and improve overall healthcare outcomes. An open space filled with collective tools that lay the groundwork for a new era of medicine. This is the end of generalized, population based approaches to care. The future will be dominated by those with a vision of something better. This new journey will be empowered by the digitalization of human beings.  Influenced and controlled by those who understand innovation. The convergence of this technology to decode and define individual granularity at the molecular level, from womb to tomb, will enhance the experience for all stake holders.

In 2010, Dr. Richard Ablin, the pathologist who discovered the PSA in 1970, wrote an Op-Ed that was published in the New York Times entitled, “The Great Prostate Mistake”. Dr. Ablin wrote, “The tests popularity has led to a hugely expensive public disaster. The medical community must confront reality and stop the inappropriate use of PSA screening. Doing so would save billions of dollars and rescue millions of men from unnecessary, debilitating treatments.”

In “The Creative Destruction of Medicine” Dr. Eric Topol introduces us to his friend who is 1 of 250,000 men in America every year who are subjected to serial prostate biopsies subsequent to a false positive PSA test. This mass screening of 30 million men every year costs the United States $3 billion annually and that doesn’t include the cumulative costs of all the biopsies, surgeries, treatments and the complications of the surgery such as urinary incontinence or impotence. Is this the best that we can do?

A mediocre healthcare system that wastes billions and is incapable of meaningful engaement. A system in which we allow pharmaceutical companies to spend $14 billion a year to influence the 600,000 people who can write a prescription.  A system in which we have enabled corporations to dictate treatment plans of friends and family members.

Science and technology have provided consumers with the crucial tools for disruption. The hostile takeover of our health care system is as inevitable as it is necessary. We must embrace this unique opportune, moment in medicine, a once in a lifetime Kairos.

***the entire report from the US Dept. of Commerce can be downloaded here:  Exploring the Digital Nation: America's Emerging Online Experience - See more at: http://www.ermconsultinginc.com/resources/

Houston Man Arrested in Health Care Fraud Scheme

U.S. Attorney’s OfficeJune 20, 2013

Southern District of Texas(713) 567-9000

HOUSTON—Mathew U. Okorocha, 63, has been indicted on charges of conspiracy to commit health care fraud, United States Attorney Kenneth Magidson announced today. Okorocha, of Houston, joins Lawrence T. Tyler, 41, also of Houston, in a 10-count superseding indictment, returned June 12, 2013.

Okorocha is expected to make an initial appearance this afternoon.

The indictment alleges Okorocha sold medical equipment through his company called KC International in Houston. He allegedly created false invoices to assist Tyler in order for his durable medical equipment company to pass its Medicare inspection. In May 2008, Medicare sought invoices from Tyler to verify medical equipment billings to Medicare, according to the indictment. Okorocha allegedly helped create false invoices reflecting more than $300,000 in purchases of orthotic equipment—back, knee, elbow, wrist, and ankle braces. Tyler sent these invoices to Medicare twice—in June 2008 and again in December 2008—in an effort to keep his billing number, according to the indictment. Medicare revoked Tyler at the end of December 2008.

The indictment alleges that from 2007 to 2009, Tyler falsely billed Medicare and Medicaid for so-called “ortho kits” that consisted of assorted braces. Tyler allegedly billed for equipment that was never delivered, billed for equipment using prescriptions from a physician who never treated the patients, and up-coded (billed for a higher reimbursed brace but delivered a cheaper brace that either did not fit the billing code or did not qualify for any Medicare reimbursement). In addition, as part of the conspiracy, the indictment alleges Tyler paid a marketer for patient billing information, a violation of the federal anti-kickback statute.

Tyler, under the company name 1866ICPAYDAY.COM LLC, allegedly billed Medicare and Medicaid approximately $2.3 million and was paid approximately $1.4 million.

If convicted, both face up to five years in prison and a possible $250,000 fine.

The charges are the result of the investigative efforts of the FBI, the Texas Attorney General’s Medicaid Fraud Control Unit, Department of Health and Human Services-Office of Inspector General, Office of Investigations and the United States Attorney’s Office. Special Assistant United States Attorneys Suzanne Bradley and Adrienne Frazior are prosecuting the case.

An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless convicted through due process of law.

http://www.fbi.gov/houston/press-releases/2013/houston-man-arrested-in-health-care-fraud-scheme

Owner Of Louisiana-Based Health Care Company Sentenced In Texas To 97 Months In Prison In Connection With $6.7 Million Medicare Fraud Scheme

June 17, 2013

The owner and operator of a Louisiana-based durable medical equipment (DME) company was sentenced today to serve 97 months in prison for his role in a $6.7 million Medicare fraud scheme, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney Kenneth Magidson of the Southern District of Texas; and Special Agent in Charge Mike Fields of the Dallas Regional Office of the U.S. Department of Health and Human Service’s Office of the Inspector General (HHS-OIG).

Kenny Msiakii, 45, of Houston, was sentenced by U.S. District Judge Nancy Atlas in the Southern District of Texas.  In addition to his prison term, Msiakii was sentenced to serve three years of supervised release and ordered to pay $2.5 million in restitution.  On Dec. 13, 2012, a federal jury found Msiakii guilty of eight counts of health care fraud.

According to court documents, Msiakii was the owner and operator of Joy Supply and General Services, a company based in Shreveport, La., that purported to provide orthotics and other DME, including power wheelchairs, to Medicare beneficiaries.

Msiakii used Joy Supply’s Medicare provider number to submit claims to Medicare for DME, including orthotic devices, that were medically unnecessary and, in some cases, never provided.  Many of the orthotic devices were components of “arthritis kits” and purported to be for the treatment of arthritis-related conditions; however, the devices were neither medically necessary nor appropriate for such conditions.  The arthritis kit generally contained a number of orthotic devices including braces for both sides of the body and related accessories such as heat pads.

According to court documents, from November 2007 through September 2009, Msiakii submitted claims of approximately $6.7 million to Medicare and was paid approximately $3.6 million for devices that were not medically necessary and, in some cases, never provided.

This case is being prosecuted by Assistant Chief Laura M.K. Cordova of the Criminal Division’s Fraud Section.  The case was brought as part of the Medicare Fraud Strike Force, supervised by the U.S. Attorney’s Office for the Southern District of Texas and the Criminal Division’s Fraud Section.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion.  In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.

Source: Justice Department

http://newsroom-magazine.com/2013/executive-branch/justice-department/lousiana-medicare-fraud-schemer-kenny-msiakii-sentenced-to-97-months/