Health Wonk Review - Heat Wave edition

HWR co-founder Joe Paduda hosts this week's outstanding collection of insightful, yet wonky, health care-related posts.

Medicare Hospital Penalties

Medicare is monitoring hospital readmissions and they are not happy. Georgia Seniors on Medicare need to know their rights when they are admitted, and then readmitted to the hospital for the same medical condition.

If Medicare get's their way, hospitals could be held financially responsible for seniors on Medicare that may have been discharged too soon.

In an effort to save money and improve care, Medicare, the federal program for the elderly and disabled, is about to release a final rule aimed at getting hospitals to pay more attention to patients after discharge.

A key component of the new approach is to cut back payments to hospitals where high numbers of patients are re-admitted, prodding hospitals to make sure patients see their doctors and fill their prescriptions.

Medicare also wants to pay less to hospitals with higher-than-average costs for patient care. It has proposed calculating the costs by combining a patient’s hospital expenses with fees incurred up to 90 days after discharge.

In other words, if Medicare decides you were discharged too early the HOSPITAL, not Medicare, will be responsible for covering the cost of your care.

Medicare states that hospital readmissions cost Medicare about $26 billion over a 10 year period.

Now $26 billion might seem like a lot of money to you and me but Washington loses that much change in the sofa on a weekly basis.

Medicare’s penalties could be significant — and widespread. Almost 7 percent of acute-care hospitals — 307 out of 4,498 — had higher-than-expected re-admission rates for heart failure, heart attack or pneumonia, according to Medicare data. Under Medicare’s draft proposal, which it put out in May, penalties would start in October 2012 and hospitals with the worst re-admission rates eventually could lose up to 3 percent of their regular Medicare payments.

Hospitals with patients who cost Medicare lots of money during and after their hospital stays also could be hurt. Beginning in October 2013, these spending levels would count for a fifth of Medicare’s “value-based purchasing program,” which alters hospital payments based on a long list of quality measures.

This does not look good for Medicare beneficiaries either.

“The incentives we’re putting into place have created a whole new way to think about hospital care,” said Jonathan Blum, deputy administrator of the federal Centers for Medicare and Medicaid Services (CMS).

Absolutely. Consider the following "new ways" to thnk about hospital care.

• Sorry, you are too sick, we can't admit you.


• For THAT condition the hospital across the street is a better choice.


• If we admit you and you return it is going to cost us money. Guido will make sure you never again have any complaints about your condition.


• You are well enough to go home now so we will just go ahead and pull the plug. The orderly will be around in an hour or so to roll you out.


• We no longer treat sick patients on Medicare. Come back when you have cash.

OK this might be a stretch but rationed health care wears many faces.

“The more hospitals realize they’re going to be held accountable, that’s where they are going to get creative,” Patel said.

That's a mouthful.

Medicare was never designed to cover all the cost of a hospital stay. The current Medicare Part A deductible is $1132 per admission for the first 60 days. If the hospital is not found liable for an early discharge, who pays?

Or if the hospital appeals the charge that they should be liable for any readmission, who pays until the appeal process is complete?

The answer could be that YOU pay.

How much money do you have in your bank to cover one or more readmissions?

Another sip of COLI

Also known as 'Dead Peasant Insurance," we last considered corporate Owned Life Insurance (COLI) plans almost 5 years ago, when we reported on their (apparent) demise. It seems, though, that George Romero must have been a life insurance mogul, because COLI plans are back in the news:

"Some state insurance regulators are looking into the idea of allowing tax-free exchanges of corporate-owned life insurance policies"

The problem arose out of the solution. That is, just because one couldn't sell new COLI plans, old ones didn't just fade quietly away. They stayed on the books (generating premiums and claims), but with little incentive to do much else with them. Some companies, looking at the cash values of these plans, recognized a treasure-trove of cash sitting idly by. In fact, some of these plans were beginning to self-destruct, as the internal costs ate up the cash build-up.

What to do?

One alternative is to roll the existing, poorly-performing policy into a new, presumably better-performing one. The problem is that old standby, "insurable interest." In this case, it's a legitimate concern, "because a COLI policy may insure former employees as well as current employees, and the employer may have difficulty re-establishing insurable interest on all lives covered by a COLI policy."

Not to mention medical insurability issues, but that's not addressed in the article.

So far, it's all talk, but we'll keep an eye out for any resolution (and any zombie life policies).

Rewarding Customer Service

Several years ago, I received as a gift a "gently-used" Sirius satellite radio, which I've rather enjoyed. The monthly fee is reasonable, although it basically follows the cable-tv model: 350 channels available, and I only listen to 2 or 3 (guess which kind?).

For the past two months, reception has been spotty; at first, I thought it was clouds or sunspots, but after checking with customer service, we eventually determined that the unit was reaching the end of its useful life, and needed to be replaced.

I'm on a month-to-month plan, and I have a unit that's "semi-permanently" mounted in the car [ed: "semi-permanently?" Isn't that like "sort of pregnant?"]. I was looking for a similarly configured unit to replace it.

Poking around the Sirius web-site, I found just the thing: a Stratus 6 (speaking of clouds). Priced at $50, it seemed a good choice. But when I clicked on it to order, I was told that it required that I switch to a 3-month payment plan, which I didn't want to do (if I chose "no subscription," the price jumped to $70!). I also felt that, as a long-time customer, the $15 "activation" fee needed to be waived.

So I called 'em up.

I spoke with "David," a very nice young man who tried very hard to meet my demands. He had no issues with waiving the activation fee, but told me that there was no way he could sell me the radio at the $50 price point if I insisted on staying with the monthly service plan.

At that point, I explained that, having lived the better part of two months without the service at all, I was prepared to just cancel and walk away altogether. But David was tenacious, and came up with a wonderfully creative solution that made everyone happy. He would keep me on the monthly plan, but give me a $20 credit on my account, to make up the difference. He then offered to credit the $4.89 sales tax on the new unit to my account, as well This was a terrific demonstration of outside-the-box thinking, and a true to commitment to great customer service. The new radio is on its way, and I am, in fact, a very happy customer.

Kudos, Sirius!

Grand Rounds is up!

Dr James Logan hosts this week's collection of interesting (and often thought-provoking) medblog posts.

The Lighter Side: 9 Reasons Why You Should Fire Your Broker

From FoIB Chad:

9. He named his first daughter Erisa.

8. He thinks AD&D coverage requires the participation of a Dungeon Master.

7. She took a correspondence course to be a lawyer but just missed passing the bar exam because she didn't know how to make a mojito.

6. She thinks STD isn't a problem as long as you get a penicillin shot right away.

5. He would rather wear a tinfoil fedora than purchase alien abduction insurance from Lloyd's.

4. He thinks Inland Marine insurance is what you buy for your BassTracker.

3. She recommends prize indemnity insurance just in case you don't win the Powerball next week.

2. She thinks Excess and Surplus lines is primarily for fat people.

And the number 1 reason you should fire your broker. . . .

1. He thinks Health Care Reform was about health, care or reform.

DDDUUUHHH

Hank recently posted a short blog with a headline that stated the obvious as if it was new information. I have one to add to his list, “Physicians compensated for volume, not quality.”

Really, is this news to anyone? All medical professionals bill using the “Current Procedural Terminology” Handbook; known in the field as CPT codes. The middle name is Procedure, i.e. what you did, not the “Current Outcome Terminology” handbook. Since a physician is paid based on what he does, then he needs to have many procedures in a day in order to make money. He does so by doing more procedures, seeing more patients: volume is the name of the payment game.