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More Healthcare is Not Always Better Healthcare: A Conversation With a Friend

By: | Tags: | Comments: 0 | August 5th, 2016

Recently, a friend asked me why I was so strong on managed care, pay-for-performance (in most cases, however, clearly not all), outcomes measurements, capitated payments, or a combination of these. The presumption my friend has is that effectively anything that reduces cost, reduces care and options for the doctor-patient relationship.

The assumption that many have is that for an insurance company or managed-care company, it is in their best interest to deny care and reduce costs. This clearly does not place the patient’s wellness first. However, I explained to my friend that while this could have been either the perception or the reality a few decades ago, having worked with so many managed-care companies and insurance companies in the last two decades, it is clear that the insurance companies understand (especially in the Medicare market) that they have a long-term investment in their patients (or members as they refer to them). I have had many conversations with past medical practioners that were contracted by the managed-care companies or care management department, and question the care being provided to a member to improve the patients’ wellness. Today, there are a myriad of Quality Measures that are required to be reported as well as compensated by Medicare and Medicaid that bring patient wellness front and center.

I conveyed to him that we were managing the care of Medicare members and that many, many times we were proactive in getting patients preventative care, advanced diagnostics, and helping patients with compliance to their care protocols. This meant that we literally sent patients reminders, we called patients, we sent representatives to their home, and we really cared that the patients complied with their care guidelines. What drove us was the quality of care our health system provided, and in turn, this provided the reason for our existence. Our care coordinators, our nurses, our doctors all put patient care first. Second, was financial reward; we knew that when a patient was noncompliant with their care protocol, it was more likely to lead to urgent care or even hospitalization. We knew that a patient who did not take their medication as prescribed by their physician could place their life at risk and again made the patient more likely to require more expensive urgent care or hospitalization. So, with the equivalent of a dual mandate, we had to put the patient’s care above everything else, and when we got that right we were likely to also have the best financial results.

We have said many times that “more care is NOT better care.” This week, the concept was refreshed again beyond this conversation with a friend with two reports in the media. One dealt with the results of a survey that said that sometimes some patients get worse when they go to rehabilitation hospitals to recover from a stroke, injury or recent surgery.

In a government report published by the Office of Inspector General of the U.S. Department of Health and Human Services (HHS) noted that 29% percent of patients in rehab facilities suffered a medication error, bedsores, infection or some other type of adverse event as a result of the care they received. Doctors who reviewed Medicare cases from a broad sampling of rehab facilities say that almost half of the 158 incidents they spotted among 417 patients were preventable.

The oversight study from the Office of the Inspector General focused on rehabilitation facilities that were not associated with hospitals. Rehab facilities generally require that patients be able to undergo at least three hours of physical and occupational therapy per day, five days a week. Patients at these facilities are presumed to be healthier than patients in a more typical hospital or a nursing home. Still, the findings echoed those of previous studies that found more than a quarter of the patients in hospitals and a third in skilled nursing facilities, suffered harm related to their care.

From the Report from the Office of the Inspector General:


This report is part of a series on adverse events in health care settings, defined as harm resulting from medical care. Previous OIG work identified harm rates of about 30 percent in both acute-care hospitals and skilled nursing facilities (SNF), with an attendant toll on patient health and taxpayers’ costs, the latter amounting to billions of dollars annually. This report extends our work by evaluating care provided in rehabilitation (rehab) hospitals. Rehab hospitals are post-acute providers that specialize in intensive rehabilitative care for patients recovering from illness, injury, or surgery. While in recent years’ stakeholders have paid considerable attention to patient safety in acute-care hospitals and increasingly in SNFs, less is known about adverse events in other health care settings. An increased understanding of adverse events that occur in this unique setting would better equip health care providers and other stakeholders in taking actions to improve the safety of patient care in rehab hospitals.


We reviewed medical records to estimate the national incidence rate, preventability, and costs of adverse events in rehab hospitals. We reviewed a nationally representative sample of 417 Medicare beneficiaries discharged from rehab hospitals in March 2012.


An estimated 29 percent of Medicare beneficiaries experienced adverse or temporary harm events during their rehab hospital stays, resulting in temporary harm; prolonged stays or transfers to other hospitals; permanent harm; life-sustaining intervention; or death. This harm rate is in line with what we found in hospitals (27 percent) and in SNFs (33 percent). Physician reviewers determined that 46 percent of these adverse and temporary harm events were clearly or likely preventable. Physicians attributed much of the preventable harm to substandard treatment, inadequate patient monitoring, and failure to provide needed treatment. Nearly one-quarter of the patients who experienced adverse or temporary harm events were transferred to an acute-care hospital for treatment, with an estimated cost to Medicare of at least $7.7 million in one month, or at least $92 million in one year, assuming a constant rate of hospitalization throughout the year.


The incidence of adverse events in rehab hospitals is similar to that in acute-care hospitals and SNFs, as reflected in previous OIG findings, confirming the need and opportunity to significantly reduce the incidence of adverse events across health care settings. We recommend that AHRQ and CMS raise awareness of patient safety issues in rehab hospitals and seek to reduce patient harm. This effort should include: (1) collaboration to create and disseminate a list of potential adverse events that occur in rehab hospitals and (2) the addition of information about potential adverse events in quality guidance to rehab hospitals. CMS and AHRQ concurred with our recommendations.

An unrelated topic that ties into this blog from The Wall Street Journal: “Justice Department Charges Three in $1 Billion Medicare Fraud Scheme in Florida – Prosecutors outline details of its largest-ever single criminal health-care fraud case.” The article went on to discuss the case stating that the Justice Department in its largest ever criminal healthcare-fraud case charged three individuals with using a network of doctors, hospitals and healthcare providers across South Florida to improperly bill more than $1 billion to Medicare and Medicaid. The Justice Department claims that the owner of more than 30 Miami-area skilled-nursing and assisted-living facilities, masterminded the fraud, the indictment alleged. The parties to the indictment allegedly paid and received bribes and kickbacks to get thousands of patients admitted to facilities controlled by the defendants.

The article says:

“In those facilities, they were often given medically unnecessary and sometimes harmful treatments, which were then billed to Medicare and Medicaid, according to court papers.”

“Conspirators in the latest case allegedly arranged from 2009 to 2016 to have patients moved between facilities after they had reached Medicare-imposed limits on their length of stay. In some cases, patients who were drug addicts were prescribed opioids—including OxyContin and Fentanyl—to entice them to stay in the facilities, she said.”

What I find scary in this story is that some of the same individuals in this case were involved in a prior civil case where they paid $15 million (USD) to settle to the U.S. Government.

I am pointing this out to state that although egregious, this type of case is quite rare; otherwise, we would not have a viable healthcare industry. The fact is we know from our own experience and have witnessed it to be, that most providers actually under bill and under order care to avoid triggering an investigation that they could scarcely afford to defend. In supervising medical files for compliance, it was accepted practice that providers would provide a level of care that we refer to as the “standard of care.” If a “standard of care” had not been identified then they would bill Medicare below the care provided to avoid unwanted scrutiny or review.

We have seen studies that report more than half of the practicing physicians in the United States have refrained from ordering certain medical interventions – including prescribing certain “new” medications, ordering a scan or repeating a laboratory test – that had small benefits for their patients because of cost, according to a national survey.

The Journal of General Internal Medicine published a proven survey that reported 53% of the 1,348 respondents had personally refrained from using clinical services that would have provided the best patient care because of cost in the past six months. According to the survey, the services most often rationed by doctors were prescription drugs (48.3%) and ordering magnetic resonance imaging scans (44.5%). The survey also found that it mattered what term is used to describe resource allocation, and that 88% of physicians agreed it is their responsibility to exercise “wise financial resource stewardship” in the care of patients; 81% agreed it is their responsibility to promote “cost consciousness” in the care of patients however, only 22% agreed it is their responsibility to “ration” care. This treads closely to professional ethics questions when patient age or “ability to pay” is folded into the decision making process!

The survey comes at a time when physicians are actively pursuing or developing capabilities around value-based payments for their practices.

Where is the balance?

We believe that the private pay local healthcare of the 1950s yielded to the 1960s (where Medicare was crafted) and that lead to the use of systems and processes. If you need a point of reference just watch one episode of Marcus Welby M.D., the number one U.S. television drama (1970) that ran for seven years on ABC Television Network (1969-1976). At the beginning of this period, providers were paid based on what they charged. Then, in the 1970s and 1980s, providers and hospitals were paid based on payment tables and/or cost of care, not what they charged. The 1990s lead to huge growth in managed care with payments based on disease types and emergence and the death of physician practice management companies (PPM). Medicare HMOs exploded, along with other commercial managed care products, as a way to control cost for employers, consumers and Medicare beneficiaries. In particular, those that had Medicare were give more options, and we believe that led to better patient outcomes and even more advancement in care. During the first part of this century, the industry struggled however, in the end prescription drugs were added to all of Medicare. As of today, the industry has begun a deep transition to evidenced-based medicine that is only possible with technology and electronic health records (EHRs). We believe that the drive to EHR was always providing better outcomes, controlling cost and reducing fraud, abuse, duplication of services and yes, unneeded care.

We strongly believe that in the early 2020s, the drive will be for the patient to control their own medical destiny by using data and technology to interact with their providers and their entire care team. In 10 years, the alleged fraud that we noted above will far less likely happen, and if it does, it will be detected as fast as your credit card company detects fraud on your credit card. Medical fraud will be much more difficult to accomplish when providers are paid for keeping patients healthy, when patients can see anytime and anywhere their wellness and related financial records, and where government can instantly see what it is paying for and how it relates to what is going on with the patient’s wellness. Any question about the validity of this? Simply plot the trend line for the past 50 years, and you will see very clearly that this is where we are headed, and have to head, in order to stem the rising cost of healthcare.

– Noel J. Guillama, President,_M.D.

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