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The Jackson & Coker Industry Report is a compendium of healthcare news,
commentary, and other important information for busy physicians and hospital /
practice administrators. The monthly newsletter incorporates original research
and studies supplied to Jackson & Coker by a nationally recognized research
firm.
Welcoming a New Year and Publication!
With the start of a new year, we proudly present a new online publication geared
toward busy physicians and hospital / practice administrators: Jackson
& Coker Industry Report.
Our monthly newsletter offers timely information related to the healthcare
industry at large and physician staffing in particular. Each edition will
contain hard-hitting medical news along with informative articles that discuss
employment and compensation trends, recruitment and staffing solutions, career
development, medical technology, payer and reimbursement issues, provider
credentialing, and legal affairs.
We’re also planning to regularly publish industry surveys focusing on physician
recruitment, relocation, compensation and similar concerns. The lead feature in
our inaugural issue is an updated “Willing to Relocate Survey.” First
commissioned by Jackson & Coker 20 years ago, the survey findings compare the
principal motivating factors--then and now--that influence why doctors opt to
make a career change involving relocation.
Future issues of the Jackson & Coker Industry Report will
spotlight special reports on “hot topics” within the healthcare industry that
are of particular interest to our readers. We appreciate reader feedback and
look forward to providing a valuable service and resource to career-minded
physicians and hospital / practice administrators who want to be more effective
in their roles.
Cordially,
Calvin Bruce
Managing Editor
Exclusive Survey-Expenses: Rising Costs Hit All Physicians
Source: Medical Economics
Date: 12/07/2007
According to a survey issued by Medical Economics, the cost of running a medical practice continues to escalate due to increases in general expenditures like payroll, energy costs, office facilities, and malpractice and healthcare premiums. Other line item expenses vary depending on the type of practice. The following indicates the median annual cost for primary care practices, excluding bonuses or retirement/profit sharing contributions:
Family practitioners: $235,000
General practitioners: $180,000
Internists: $200,000
Ob/gyns: $360,100
Pediatricians: $266,300
All primary care: $240,000
Ob/gyns and pediatricians, the two physician groups with the highest costs, generally use midlevel providers more frequently than their internist colleagues, thereby increasing their payroll expenses. With regard to pediatrician practices, immunizations are largely responsible for the high operating costs. Pediatricians’ median drug supply costs are $82,800 according to MGMA, compared to internists, who pay just over $8,000. Low reimbursement rates coupled with storage costs on vaccines mean that pediatric practices sometimes fail to break even on immunization costs.
With regard to location, inner city physicians spend less and make less compared to their urban, suburban and rural peers. Conversely, suburban practices, with generally higher expenses, have to rely on higher patient volumes to offset more expensive facilities and higher rental rates. Suburban practices also add to their expenses by keeping longer hours to satisfy the schedules of commuting families.
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Limits Weighed on Physician-Owned Hospitals
Source: The Washington Post
Date: 12/09/2007
The recent debate surrounding Medicare pay reductions has reignited political interest in the politically contentious topic of physician-owned hospitals; namely, the question of whether physicians should be able to own the hospitals to which they send their patients.
Senator Charles E. Grassley of Iowa, the top Republican on the Senate Finance Committee supports the reforms due to the allegedly negative effect that physician-owned “specialty hospitals” have on community hospitals. According to the senator, specialty hospitals “pass the buck” on emergency care and “cherry-pick based on profits rather than patient needs.” Traditional hospitals complain of lost business and conflict of interest, while the backers of physician-owned hospitals say they promote competition and improve the quality of care.
Congress imposed a temporary moratorium in 2004 on establishing new physician-owned hospitals amidst lobbying pressure from both sides. The moratorium has since expired, and interest in the topic reemerged in August when the House passed a Democrat-sponsored measure that would limit physician investment in existing doctor-owned hospitals to 40 percent, and individual stakes to no more than 2 percent, while banning the creation of new physician-owned hospitals. The issue is unlikely to receive congressional action before the New Year.
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FDA Approves Fewest Drugs Since 1983
Source: The Wall Street Journal
Date: 01/08/2008
Business and financial outlet Bloomberg recently reported that the Food and Drug Administration (FDA) approved only 19 new drugs for all of last year, the lowest total since 1983. These recent numbers confirm the struggles and difficulty of drug companies to come up with new products. Of the 19 newly FDA approved drugs, 17 of them are molecular entities, meaning they are entirely different and innovative drugs. The other two approved drugs were biotech drugs. The companies with most approvals this past year were Novartis and GlaxoSmithKline, each receiving two approvals a piece.
Many industry insiders blame the decreased approvals on tougher regulations and standards by the FDA. The FDA, however, defends its standards and claims that they have not altered their requirements at all. There are many hypotheses within the industry as to why there has been such a decrease in drug approval rates recently but none that are widely agreed upon or seemingly accurate.
One of the more popular arguments from doctors is that the pharmacy industry has become too overpopulated and bloated as well as too bureaucratic and risk averse. It is also possible that the industry has shifted its efforts away from novel drugs and more towards modifying pre-existing medicines in order to fully maximize sales during this apparent research drought. It is also probable that the majority of the more simplistic drugs have already been found and that drug researchers will need a major scientific discovery or breakthrough before they can come up with any fresh and relevant drugs.
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Healthcare Spending Reached $2.1 Trillion in 2006, CMS Says
Source: Healthcare Finance News
Date: 01/01/2008
Figures recently released by the Centers for Medicine and Medicaid Services put American healthcare spending at $2.1 trillion dollars for 2006. The figures indicate price and spending increases in virtually every aspect of the healthcare industry. The growth of spending indicates an accelerating pace of increase in healthcare spending which outstrips overall economic growth and the national rate of inflation. The CMS report also portrays a growth in out of pocket spending of 3.8% as well as increases in private health plan premiums (up 5.5%) and overall prescription spending (up to $216.7 billion).
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Medicare Spending Rose 19% in 2006
Source: Medical News Today
Date: 01/08/2008
According to a recent report in Health Affairs, Medicare spending for 2006 increased at a faster rate than it had in the previous twenty-five years. In 2006, health care spending amassed $2.1 trillion, accounting for nearly 16% of the American economy, an increase of 6.7% from the year before. This rise in Medicare spending is due in large part to an increase in prescription drug benefits for the disabled and elderly. In contrast, Medicaid spending dropped 0.9% in 2006 to $176 billion. This is primarily because over 6 million senior citizens switched from Medicaid to Medicare programs in 2006. These numbers indicate that health care spending is still increasing faster than the rest of the economy and that the cost of medical services continues to grow at a faster rate than the average income of Americans.
The total amount of spending on drugs rose 8.5% in 2006, a rise from the 5.8% increase in 2005. Total prescription drug spending for 2006 was nearly $217 billion. However, the authors point out that roughly 63% of all prescriptions administered in 2006 were for generic drugs, compared to only 56% in 2005. The report also illustrates that just about a third of all US health spending is consumed by hospital care alone (31%). The 31% spent on hospital care can be broken down into physician services (21%) and prescription drugs (10%).
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Medicare to Require Physicians to Use New ID Numbers on March 1
Source: American Medical News
Date: 01/14/2008
Beginning on March 1st, all physicians who bill Medicare electronically will also have to provide their national provider identifier (NPI), as well as any other former IDs that they may have been using. In the recent past, the Medicare program has allowed physicians to file with just their older, “legacy” identifiers while they wait to attain their new NPIs. This policy was to insure that the personal data attached to all of the numbers on the NPIs were not mismatched.
After May 23rd of this year, physicians will be required to make all of their electronic claims to Medicare and other health care payers using only their NPIs. This deadline entails that all identification discrepancies have to be handled and corrected by then. All physicians that file claims electronically must comply with these issued deadlines, however, these deadlines do not apply to any physician who files paper claims.
Many physicians are against the transition to the new identification policies and deadlines because of the ineffectiveness and disorder already created by the NPIs. In September of 2007, the Centers for Medicare & Medicaid Services requested that carriers stop accepting claims from any physician whose information did not match between their new NPI and their older identification numbers. This created several problems for physicians, including failed Medicare payments. Despite recent efforts made by the American Medical Association and the Medical Group Management Association, CMS will not likely postpone or retard the set deadlines for establishing a highly desired NPI-only system.
The CMS claims that the majority of Medicare claims being filed by physicians electronically are being processed without incident and that only roughly 10% of all claims continue to be devoid of an NPI. The CMS claims that when they made the orders in September to reject any mismatched filings, the subsequent rejection rates were rather low. Still, the AMA and MGMA insist that those effects were significant. Although the majority of the problems between the physicians and their carriers are being adjusted in a timely fashion, many physicians still continue to experience troubles with their electronic claims and payments.
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Physicians Gain New Tool to Better Manage Acute and Chronic Pain
Source: Medical News Today
Date: 01/09/2008
Some physicians are getting a beneficial new tool for managing chronic pain. The Federation of State Medical Boards Research and Education Foundation (FSMB) is offering a new handbook to all physicians. The FSMB is a national non-profit organization that represents seventy medical boards of the United States and works to ensure and improve “the quality, safety and integrity of health care by developing and promoting high standards for physician licensure and practice.”
The handbook, Responsible Opioid Prescribing: A Physician’s Guide, is intended to further assist doctors in handling their patients’ acute or chronic pain. The book offers actual explanations and practical strategies that “address issues of undertreatment of pain, risk of prescription drug abuse and improved patient care.” As funds are raised, FSMB is offering medical boards, on a state-to-state basis, print copies of the book to be distributed to physicians across the United States. It is estimated that upwards of 750,000 physicians across the country will receive one of these handbooks. The guides can also be customized from state-to-state to include particular state-specific statutes, policies, and rules and regulations. The handbook is based on FSMB’s Model Policy for the Use of Controlled Substances for the Treatment of Pain. The book covers a wide variety of topics, including recommendations for:
Ensuring effective patient evaluation
Creating a function-based treatment plan with actionable patient goals
Obtaining a written patient-physician agreement that includes informed consent and significant patient education
Overseeing periodic review that focuses on progress toward functional goals
Making specialist referrals and managing difficult patients
Creating and maintaining clear, consistent, transparent and detailed documentation
Remaining up-to-date on federal and state controlled substance policies
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FCC Dedicates $417 Million to Expanding Rural Telehealth Systems
Source: American Medical News
Date: 12/17/2007
In November, the Federal Communications Commission allotted $417 million over a three-year period to the expansion of telehealth services in rural communities across the United States. The effort, as part of the Rural Health Care Pilot Program, will fund construction of statewide or regional broadband telehealth networks in 42 states and three U.S. territories.
The FCC had originally planned to allocate $100 million over two years but expanded the program after receiving more applicants than anticipated. The pilot program will now help fund telehealth connections for more than 6,000 physicians, health professionals and facilities.
Rural physicians typically lack the high speed internet access necessary for telehealth services. Basic internet service exists but cannot support the high bandwidth necessary to transmit medical records, radiological readings or video conferencing. The funds will be used to install or develop a range of services, including higher speed computer connections, fiber optic cable installation, and high-speed internet at the homes of on-call physicians. The effort is expected to dramatically improve telehealth capabilities of rural physicians across America.
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Tax Credits for EMRs
Source: American Medical News
Date: 12/03/2007
A new AMA policy on health information technology attempts to address physicians’ cost concerns surrounding electronic medical records. While there is a clear push for physicians to adopt EMRs, many cannot pay for the technology that private payers and government agencies are requesting.
While EMR use has been growing steadily, widespread use would require financial help for doctors, especially those in small practices. Consequently, the AMA approved a policy calling for a full, refundable federal tax credit or equivalent financial mechanism to cover physician practices for the costs associated with purchasing and implementing clinical information technology. In fact, Health Affairs reported that in 2005, initial EMR costs averaged $44,000 per physician with an additional $8,500 of annual costs.
With Medicare payments set to drop, it is only reasonable to help physicians mitigate information technology costs. Accordingly, the AMA has encouraged Congress to make sure physicians are not disproportionately burdened with the cost of developing and maintaining a national health IT network benefiting all sectors of the industry. They feel a federal tax credit program would encourage physicians to adopt the technology.
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CMS Readies Test of New Assessment Tool
Source: Modern Healthcare
Date: 12/17/2007
Centers for Medicare and Medicaid Services (CMS) will begin testing the new Continuity Assessment Record and Evaluation (CARE) system, a tool designed to determine post-acute care payouts, in 2008. The three-year system demonstration will take place in 10 to 15 markets, representing roughly 150 providers across a variety of healthcare organizations.
The current CMS tools used to gauge Medicare payment – IRF-PAI, MDS and OASIS – are incompatible with one another and utilize different measurement scales. CARE will address the current incompatibility issues and lack of centralization by using standardized data formats and a single web-based application for claims submission. According to a CMS White Paper on the new system, CARE is also a potential vehicle for all healthcare providers to standardize patient data while incorporating changes in evidence-based medicine. The three-year trial period will be used to measure treatment and outcomes of patients in post-acute-care setting in four domains: cognitive impairment, medical, functional, and social/environmental factors.
Starting in January 2008, providers can submit reports directly to CMS via internet. CMS will eventually develop interoperable systems that will permit physicians to upload stored patient information and reduce data entry time. In response to the disclosure of CARE, the American Hospital Association noted that the tool has the potential to streamline hospital discharge planning but that general acute-care hospitals will suffer a massive resource burden from the cost and time required to conduct sufficient reporting.
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Physician Recruitment in the Wake of Stark III
Source: Physician’s News Digest
Date: 12/01/2007
The Centers for Medicare and Medicaid Services published their final rules regarding physician self-referral prohibition in September of 2007, making drastic changes to the Physician Recruitment section.
Stark, the name by which the regulations are best known, holds that funds paid directly to a recruited physician by a recruiting hospital with the purpose of inducing the physician to relocate his practice to within the geographic area served by the hospital are protected if the following four conditions are satisfied:
The arrangement is set out in a signed written agreement.
There is no condition in the arrangement that the physician refer patients to the hospital.
The funds paid to the physician are not based on the volume or value of any actual or anticipated referrals by the physician or other business generated between the parties.
The physician is permitted to establish staff privileges at other hospitals and to refer business to any other entity.
The Stark rules were amended to clarify and loosen regulations on what constitutes a “served geographic area” around a hospital to include all contiguous zip codes within that area. Previously, under-populated areas and areas from which a hospital drew a low percentage of its clientele were disallowed from inclusion. The regulations governing the necessary distances to which a physician must relocate his practice when recruited were also modified to clarify policy. Alterations were also made to policies loosening restrictions on the recruitment of physicians in rural and small communities.
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Bringing in Rural Physicians
Source: Trustee
Date: 01/01/2008
The national health worker shortage is acutely felt in underserved and understaffed rural areas. An article in the January issue of Trustee addresses the problem and offers a few solutions for rural hospital and practice administrators.
Over the next fifteen years, demand for physicians will outstrip growth as the “baby boom” generation ages and becomes eligible for retirement. Physician, nurse, and practitioner shortages will be felt more and more, and attracting doctors to rural areas is a crucial consideration, as some thirty million Americans live in these underserved areas.
This is not solely a crisis, however. The authors view this as an opportunity for trustees to step up their interactions with their hospitals in order to aid in recruitment. A number of helpful hints for recruiting are provided. Trustees looking to attract doctors to rural areas must be willing to:
Interweave physician and family into the community. Physicians moving to a new area will need to feel welcomed in order to make them more likely to stay.
Provide aid in envisioning life in a given community. Letting potential staff know the possibilities of an area is essential in helping them to imagine their life there.
Provide aid in social integration. Top board members must be ready and able to take a personal role in welcoming new staff.
Outreach is essential. Top staff need to step up recruiting efforts at medical schools. Administrators are advised to look at their best doctors and use them to recruit heavily at the schools that they come from.
Play up the benefits of rural remoteness. Administrators can turn remoteness into a positive factor by demonstrating the hospital’s commanding regional market share, the range of possibilities open to a recruit, and the financial benefits of leveraged contracts with payers.
Allow doctors a range of freedom. Administrators must be ready to allow recruited doctors to practice medicine the way they want to, within the bounds of safeness and regulations, of course.
Realize the possibly disadvantaged position of the hospital with regards to location and incentivize appropriately. Work-life balance, payment, and other benefits must be made as enticing as possible to lure recruits.
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Pilot Program Aims to Train Spanish-Speaking Doctors
Source: The Wall Street Journal
Date: 01/18/2007
A pilot program at the University of California–Los Angeles targets the surplus of medical-school graduates from Latin America to address a shortage of Spanish-speaking doctors in the United States.
A record influx of Latin American immigrants into the U.S. has left clinics and hospitals across the U.S. to grapple with Spanish-speaking patients. Poor communication can result in millions of dollars annually in unnecessary testing, emergency room visits, delayed or inaccurate diagnoses, or noncompliance with medical instructions.
UCLA’s pilot program prepares participants for U.S. medical board exams and issues a stipend to medical school graduates of Latin American countries. Upon completion of their residency, participants are required to spend at least three years in medically underserved areas in the United States. Prior to starting the program, most participants had been working in the U.S. as X-ray technicians, nursing assistants, or healthcare volunteers. The program will complete its first year in February 2008 with only 14 participants.
Administrators plan to replicate the program at other University of California campuses, and according to the chairman of the Department of Family and Community Medicine at the University of Texas Health Sciences Center in San Antonio, the Texas system is also considering implementing similar programs to address the state’s shortage of Spanish-speaking doctors.
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Reaching Out to Different Cultures
Source: HFM Magazine
Date: 12/01/2007
Understanding and accommodating diverse cultures is a successful and beneficial approach to dealing with the issue of diverse patient populations. So says the chairman of the Health Financial Management Association in an article in the December issue of HFM Magazine.
The author cites the outreach efforts of the New York Downtown Hospital, a 150-bed hospital in Lower Manhattan. Fully 80% of the hospital’s inpatients are Chinese. Of these, a sizeable amount are immigrants with insufficient or non-existent English skills. In response, the hospital has brought on translators and a number of staff of Chinese descent. The hospital also engages in outreach programs, offering health screening and health education opportunities at community fairs in Chinatown.
The policy of outreach has yielded great benefits. The Chinese community in Lower Manhattan now has much improved access to health care. The hospital has increased its market share of inpatients in that region as well and reports a greater number of births among the Chinese community as the hospital has increased its connections with a fast growing segment of the population.
The chairman cites the New York Downtown Hospital as a great example of an organization making a real difference in its community through the use of genuine outreach, proclaiming it an example for all to take to heart.
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Partner or Employee: How to Decide
Source: Medical Economics
Date: 11/01/2007
In today’s private practice world, the road to partnership is sometimes shorter than ever. But is taking on a partnership role in a practice the safest career move? An article in Medical Economics examines the possible benefits and pitfalls of partnering up.
The authors point to a number of benefits to partnership. Becoming a partner in a firm can lead to a sizeable boost in income, and there is also the benefit of a greater deal of autonomy on the part of a partnering physician. Partners are furthermore better able to build up equity in a firm, and—in the event the firm is sold or brought under another hospital—the partners are able to share in the rewards and profits of such a transaction, whereas a physician who is solely an employee cannot share in these benefits.
However, a number of detractors to the partner status are also inherent. Partnership requires a buy-in, and the financial stake taken in a firm comes without guarantee of repayment or profitability. If the practice goes under, that money is lost. Besides the heavy financial risk, there is also often a heavier workload. This can lead to added stress and decreased morale if things aren’t going well. Partnership also requires a greater deal of administrative work, which may not sit well with physicians looking solely to practice and leave paperwork to others. Lastly, there is no guarantee of a retirement package or a buy-out from the practice, as these things must be negotiated separately.
Keeping these factors and possibilities in mind, a physician is more fully able to weigh the pros and cons of partnering up. It is ultimately up to the individual to decide if partnering with a particular firm is the best career choice.
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10 Things You Should Know About Locum Tenens
Source: Locum Life
Date: 01/01/2008
An article in the January 2008 issue of Locum Life offers helpful hints to physicians looking to become locum tenens practitioners. The authors asked industry experts, seasoned locum tenens physicians, and registered nurse anesthetists for their insights on locum tenens as a practice alternative. Their answers shed a good deal of light on the practice.
Locum tenens practitioners generally fall into three categories: recent graduates, physicians between jobs, and retired or semi-retired professionals.
Locum tenens is attractive to physicians due to the range of experience available in such a practice.
Locum tenens professionals need to look for staffing firms that will provide regular pay, malpractice coverage, and credentialing assistance. These things can be set up by a physician on his own, but the use of a staffing firm generally makes for an easier and more pleasant experience.
Locum tenens need to take the initiative in the credentialing process in order to ensure that it is properly completed.
Locum tenens professionals are able to practice in a variety of settings in both governmental and commercial roles. Movement between these two spheres is limited by regulations, of course, but navigation between them is both doable and advisable for a richer locum tenens experience.
Locum tenens should utilize their staffing firms to secure transportation and housing arrangements.
Practitioners should be sure to be aware of key aspects of their contract arrangements with regards to the practice. All contracts should be thoroughly reviewed to ensure job stability and proper compensation as well as the absence of conflicts of interest.
Practitioners should be aware of the contractual obligations of working in a given facility.
Locum tenens professionals can be successful if they keep an open mind as to positions, career paths, tenures, and compensation packages available to them due to their particular status.
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Pay is Up; Profit Still Elusive
Source: The Physician’s Resource
Date: 01/12/2007
Physicians around the country saw another increase in their compensation in 2006, and productivity jumped up as well, according to numbers released by the American Medical Group Association.
An overall increase in compensation was recorded, with an average increase of 4.8% for physicians. The two highest increases were reported for pulmonary disease and infectious disease specialists, which reported 11.5 and 9.6% growth respectively. Productivity was also reported to be up 7% across the industry.
Despite these numbers, physician groups appear to be operating at a loss in all regions of the US except for the West. Western groups reported an average profit of $17,317 per physician, while groups in the South reported a loss of $6,049 per physician. This loss is likely attributable to capital expenditures on information technology, the payer system, and patient education.
The study was based on physician group responses to a mailed survey. There were responses from 222 physicians groups across the country.
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Be Careful What You Promise
Source: Medical Economics
Date: 01/04/2008
When it comes to medical lawsuits and malpractice claims, it is very possible that the natural inclination of physicians to comfort and relieve their patients of pain and anxiety can, in reality, do the medical professional more harm than good. Doctors must be careful when they make simple assurances to their patients that they are not promising more than they can deliver, as lawsuits are derived primarily from two things: a patient with unrealistic expectations and a less-than-ideal medical outcome. There is limited opportunity for physicians to account for unexpected and undesirable results, but they are in complete control over their patients’ expectations. That is why it is so important for a doctor to keep these expectations realistic and not overly assuring.
Lawsuits can be triggered by overly optimistic guarantees about outcomes or by downplaying potential risks. For a patient to claim a lack of informed consent, they only have to establish and prove that “he or she wasn't informed of the risks and alternatives that a reasonable person would have considered to be important in deciding whether to undergo the proposed treatment.” Likewise, in order for a patient to claim a breach of warranty, they only have to show that he or she “relied on the doctor's representations…in consenting to the procedure, and those representations turned out to be wrong.” This means that the patient does not have to prove any form of negligence on the doctor’s part, but simply that the outcome was not consistent with the representations and warranties with which they consented or if “the patient wasn't told about common risks and complications.” Even if a physician exceeds the standard of care, overly optimistic analysis or assurance can prove very costly in the long run.
Although it is not required for physicians to go over every possible risk with a patient while proposing procedures, it is important that they thoroughly account for all of the major hazards and potentially adverse outcomes. Calming a patient’s anxieties is fine as long as the comforting is regulated enough to maintain reasonable expectations. It is more important for a patient to understand the procedures, and although things usually go as planned, there is always the possibility for adverse reactions and there are never any guarantees. This way, the patient should never be left with unreasonable expectations or a sense that any procedure is infallible.
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Physicians Challenge Lawyers’ Meritless Liability Suits – And Win
Source: American Medical News
Date: 12/03/2007
The American Medical Association reports a series of favorable court rulings is changing physicians’ battle against frivolous medical liability lawsuits. Over the past six months, numerous courts throughout the U.S. have chastised attorneys for gratuitous behavior including suing the wrong doctor, refiling a claim against a physician even though the plaintiff's expert withdrew his testimony the first time around, and having no expert testimony against one doctor, yet failing to drop the case.
While not trying to prevent legitimate claims, doctors are hoping these victories will send a message deterring lawyers from filing those that are baseless. Furthermore, there is the hope that the rulings will encourage trial judges who see abusive conduct to take action while demonstrating to physicians that the system is not completely stacked against them.
Furthermore, proactively challenging meritless cases is a way to reduce the frequency of bad claims and curb rising liability insurance costs. Dr. Jeffery Segal, founder of Medical Justice - a company that sells insurance policies giving doctors legal resources to combat frivolous claims - pointed out that when a client physician receives notice that a patient is considering filing a lawsuit the doctor believes is frivolous, the company sends a letter to the lawyer that the physician may counter-sue. Segal explained that as a result, only 11 percent of these instances then materialize into a lawsuit.
Trial lawyers agree that punishment may be justified when an attorney completely eschews responsibility by pursing a case. However, they feel this conduct is rare because there is no moral or economic incentive for plaintiff lawyers to file frivolous cases as they take on the often expensive and complicated negligence suits in bad faith.
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AG: $600 Million in Medicare Fraud Prosecutions Just a Start
Source: South Florida Business Journal
Date: 01/14/2007
The South Florida Medicare Fraud Strike Force quadrupled the number of individuals charged with filing false claims in 2007. The disrupted schemes amounted to more than $600 million in fraudulent claims.
In 2005, South Florida had 10 percent of the nation’s Medicare patients with HIV/AIDS, but accounted for $2.21 billion of the nation’s $2.31 billion in HIV Medicare drug claims, according to the Department of Health and Human Services. Prior to the creation of the task force, the US attorney’s office for the Southern District of Florida charged 58 individuals in 53 cases in 2005, as compared to 197 people in 120 cases in 2007.
The attorney’s office works in conjunction with the FBI, CMS and the Florida Department of Health. Prosecutions have been primarily focused in two areas: durable medical equipment and HIV infusion therapy to administer drugs. The legal action has allegedly acted as a deterrent for false medical claims in other medical practices.
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Employers Tell Workers to Get Healthy or Pay Up
Source: The Wall Street Journal
Date: 12/04/2007
U.S. companies are increasingly using financial incentives to motivate workers to kick unhealthy habits, such as obesity and smoking. Employers that rewarded employees for participating in wellness programs are now opting to penalize those with bad habits that do not.
Indeed, employees at some companies who are overweight, smoke, or have high cholesterol that choose not to participate in supplementary wellness programs will now be required to pay more for health insurance. Some employees' insurance deductibles could rise by as much as $2,000.
While employers want to see results, consultants and lawyers agree that interfering with workers’ lifestyles through financial penalties risks lawsuits or may even violate the Americans with Disabilities Act.
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$200+ Million Verdict: It Started with a Midlevel’s Mistake
Source: Medical Economics
Date: 12/07/2007
Last year a Tampa jury awarded $217 million, including $100 million in punitive damages, to a man whose cerebellar stroke was misdiagnosed as sinusitis and who consequently suffered irreversible neurological damage. The verdict, one of the largest malpractice awards in U.S. history, stemmed from a medical group’s improper use of an unlicensed physician assistant, a purportedly negligent doctor and infighting between the medical group and the malpractice insurance agency.
The physician, Dr. Austin, and the physician assistant, Mr. Herranz, were both employed through a medical group, Frank, Favata & Hulls, MDs, which was contracted with the hospital to manage its emergency department. Herranz recorded the patient’s history and symptoms, and Austin misdiagnosed “sinusitis/headache” based upon the information provided in the report. Dr. Austin did not repeat any exams.
The medical group would reveal 16 months later that Herranz was an unlicensed physician assistant, which Austin was unaware of at the time. The medical group also held Austin and Herranz accountable for the misdiagnosis. In the verdict, Herranz and Austin were each found 25 percent liable for compensatory damages, while the medical group was accountable for the other 50 percent. The malpractice insurer, ProNational Insurance, refused to settle the case for $2 million prior to the trial, which spurred Austin and the medical group to sue the insurer for not making reasonable attempts to settle, thus leaving Austin and Herranz personally exposed for compensatory damages.
Medical Economics recommends that in cases with multiple defendants, the possibility of an excessive verdict exists, and that physicians should therefore hire individual counsels to provide protection beyond that offered by the malpractice insurance agency.
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2007: The Year That Was in Radiology
Source: Advance
Date: 12/01/2007
For imaging professionals, 2007 was a year filled with political, social, and industry happenings that will have effects for some time to come, according to a piece in the December issue of Advance.
2007 was the year in which the “baby boom” generation—the nearly 80 million Americans born between 1946 and 1964—first began to be eligible for social security and retirement benefits. The oncoming wave of boomer retirees are 50% more likely to need an imaging procedure than are younger Americans. This will inevitably lead to a surge in work and demand for imaging technologists.
Last year also squarely placed healthcare at the forefront of American political discourse. The author points out an upcoming health worker shortage which is bound to have an impact on the industry and must be addressed if improvements are to be made in the American system.
The past year also saw the rise of teleradiology: an innovative communications technology allowing for review of imaging results from remote locations over the internet. In the future, this is likely to lead to a revolution in imaging, as smaller hospitals are able to employ off-site professionals that would otherwise be unavailable to them due to cost or geography. The author, taking all these factors into account, presents a generally positive view of the year that was and a brightly optimistic estimation of what is to come in 2008.
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Writing About Patients: the Perennial Dilemma
Source: Psychiatric Times
Date: 12/01/2007
What are the ethical implications of writing for press about a psychiatric patient? An article in Psychiatric Times addresses the ethical dilemma facing doctors caught between informing their peers and preserving patient privacy with an eye toward striking a balance between these two essential duties of psychiatrists.
The article examines the plusses and minuses of obtaining patient consent before publication. It is argued that, while informative for the psychiatric community, publication of certain cases can, if insufficient in protecting the patient’s identity, run the risk of setting back treatment program progress or even bringing about relapse in particularly on-edge patients. The author argues that, while publication of cases is a beneficial act for the psychiatric community, patient confidentiality must remain the highest ethical concern. Therefore, all means should be taken to ensure that publication of the article does no harm to the patient in question.
The article concludes that clinical publishing decisions must be made after fully taking individual case characteristics into consideration. This consideration must decide the appropriate level of confidentiality to be used or the degree of forewarning a patient should have about the publication of the study.
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Increasing Rates of Emergency Department Visits for Elderly Patients in the United States
Source: Annals of Emergency Medicine
Date: 12/07/2007
In 2005, the Centers for Disease Control and Prevention reported an increase in emergency department visit rates per 100 people. The greatest increase in visit rates was among individuals 65 years and older.
Given that older ED visitors typically require longer lengths of stay, are more likely to be admitted, and compose a growing percentage of the American population, the increase in ED visits may have a significant effect on ED crowding. If the trend continues, annual ED visits in the US for 65 to 74 year-olds could almost double from 6.4 million to 11.7 million by 2013.
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Studies Show Increasing Strain on Emergency Departments
Source: Medical News Today
Date: 12/12/2007
According to a study released by the Center for Studying Health System Change, a difficulty in receiving payments from uninsured patients contributes to an increased reluctance among specialists to work in emergency departments. The study results are based upon visits to 12 health facilities in representative metropolitan areas across the United States.
Payment issues and a greater risk of malpractice lawsuits have spurred many specialists to open private practices. Hospitals have attempted to lure specialists to work in emergency departments through higher compensation, but such methods have led to an increase in costs for patients and insurers.
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Payer & Reimbursement Issues
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Looming Medicare Pay Cut Forces Tough Decisions on Participation
Source: American Medical News
Date: 12/31/2007
The narrowly avoided Medicare pay cut would have forced physicians to make a difficult decision before the New Year. In the event of a Medicare pay reduction, which may still happen in summer 2008, physicians that continue to participate in the Medicare program would endure a 10.1 percent reduction in medical fees from Medicare patients.
Under the recently tabled Medicare package, physicians who opted to not participate in Medicare (non-PARs) could still see Medicare patients for a reduced fee by accepting “assignment” on a per-patient basis. Doctors who did not accept assignment would receive the Medicare rate and could balance-bill patients up to 15 percent more. Thus, non-PARS could receive up to 9.25 percent more in payment than participating doctors for the same service. However, non-PARs who did not accept assignment would not receive Medicare reimbursement directly from insurance carriers. Instead, Medicare would reimburse the patient directly and physicians would then invoice the patient for the full amount of payment, co-payment, and the balance-billing charge. Physicians with costly medical services could find themselves in dire financial situations if only a few patients failed to pay.
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Real-Time Payment: What’s Holding it Back?
Source: Medical Economics
Date: 12/07/2007
Real-time claim adjudication (RTCA) has been in existence for several years, but few insurance plans have offered it. Recently, however, higher deductibles have increased the need for patients in high-deductible plans to know how much treatment will cost; moreover, healthcare providers want to collect payment at the time of service. To address these concerns, Humana, United Healthcare, and BlueCross BlueShield offer real-time claim adjudication in some states.
Despite the growing need for RTCA, efforts to implement the practice have been thwarted by staffing problems and complex information exchange processes. Most problematic is that RTCA creates a dual data entry requirement under most current office practices. Practice management systems cannot transmit claims individually to particular insurance agencies, and RTCA is only offered on health plan websites. Therefore, practices that use RTCA have to enter claims twice: once on insurance websites and once in local databases, which effectively doubles the workload for support-staff.
Even in the event that insurers could integrate systems to reduce the need for dual data entry, the time it takes for physicians to complete charge-tickets, deliver them to the billing office and have the data entered supersedes any time saved during the RTCA process. To address this matter, BlueCross BlueShield of South Carolina introduced the “superbill” feature, which permits practices to upload their top 100 procedures and diagnoses into the system, thereby reducing data entry time. Similarly, United Healthcare has introduced patient cards and card readers that can quickly transfer benefits and eligibility information.
Nonetheless, RTCA still constitutes a meager percentage of the claims filed to health insurance agencies, even among payers that offer developed RTCA services.
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Physicians Fight AETNA Over Caps on Out-of-Network Pay
Source: American Medical News
Date: 01/14/2008
Aetna, one of the country’s leading providers in health insurance and products, angered many physicians nationwide recently by declaring that it will cap the amount of reimbursement paid to out-of-network doctors at 125% of Medicare. In some cases, such as Pennsylvania, in a mass mailing to doctors, Aetna declared that 125% was in accordance with the “maximum state mandate rate.” The Pennsylvania Medical Society, however, does not have a set rate as such.
Physicians are also upset that Aetna has already informed patients that they will not pay “any bill a doctor might send to make up for costs and fees lost as a result of the insurer’s cap.” Organized medicine is complaining that this tactic is not only unfair, but is also within violation of a prior settlement agreement with physicians as part of a class-action lawsuit. This agreement declared that Aetna can not “disparage” nonparticipating physicians and also that each EOB can decide the amount for which a physician may bill a member.
The AMA is in strong opposition to Aetna’s new policy, and AMA officials are fighting to regain immediate and full reimbursement to physicians for charges billed since Aetna introduced the cap.
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Payer Trend: ‘Tiering’ Physicians and ‘Steering’ Patients
Source: Family Practice Management
Date: 12/01/2007
An article in the November/December issue of Family Practice Management examines the controversial practice of “tiering and steering,” wherein payers rate the efficiency and quality of practices based only on claims data. This data is later shared with patients and has the potential to negatively affect the bottom line of practices.
Tiering and steering—also known as “physician profiling” or “economic credentialing”—has, as of recent, become a computerized method of physician cost-efficiency analysis by which a growing number of payers analyze physician claims data, compare it to that of their peers, and use this information to create tiered networks of physicians toward which they can then steer specific patients in order to save on payer costs.
While the practice has a generally positive effect on payer finances, there are possible flaws in the system for physicians. For one thing, the system doesn’t necessarily take into account the number of episodes of care that could have been prevented by primary care, such as complications due to diabetes or congestive heart failure. These profiles of doctors are typically constructed on tiers based on differences in care costs among physicians, but without proper input, they can fail to provide a true glimpse of the cost and quality of care provided by a particular practice.
Doctors are advised, in light of the system, to retain as much pertinent data on their practices as possible. Retention of such data would allow them to counteract any negative or incomplete information a payer may generate to classify a practice. This sort of capability can be instrumental in challenging an inaccurate rating from a payer, ultimately improving both the reputation and bottom line of a practice.
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You Can Negotiate with Health Plans
Source: Medical Economics
Date: 01/04/2008
While doctors, especially those in small practices, can sometimes feel overwhelmed and helpless in negotiations with health insurers, there are a number of useful tips and guidelines for how to bargain with major health plans for better compensation. Due in large part to insurance industry consolidation, competition among insurance providers has become more limited. With this said, many physicians have much more bargaining power than they may believe.
The first significant suggestion is for doctors to go right after health insurers because, if nothing else, simple negotiations can prove that lowball reimbursement is nothing more than an inadvertent mistake. Depending on a doctor’s location, specialty, and the size of one’s practice, insurers will do whatever it takes to keep them happy.
In any negotiations, it is critical that one comes thoroughly prepared. When dealing with health insurers, it is rarely cunning debating and gamesmanship that thrive but rather commonplace information – more specifically, dollar figures for billing codes. It is important for a doctor to compare what private payers tend to pay for their top codes in order to identify any inconsistencies in how they are reimbursed by individual payers. Comparing fees and payer reimbursements can often develop more bargaining points.
Preparing for a negotiation is essentially the same as developing a compelling argument. Whether a physician wants an insurer to collectively raise its rates or increase them on a selective basis, there needs to be a convincing reason for them to do so. A physician can, for example, make the claim that their practice is necessary for its market. Although this may not work in metropolitan areas due to the plethora of practicing physicians, this argument should be more effective in rural and suburban markets. A physician should also make it clear to an insurer that they improve the insurer’s bottom-line and can be viewed as a money saver. One should always have an answer or follow-up question prepared for any possible line that the insurers might throw out. This is all a part of being exceedingly prepared so that nothing can disrupt the negotiation. Finally, the subtext of any good negotiation should be the threat of walking away. Any doctor negotiating with a health insurer should make it understood that they are willing to walk away from any deal and will not be bullied.
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Insurers Seek Bigger Reach in Coverage
Source: The New York Times
Date: 12/19/2007
The insurance industry revealed on December 19th a series of steps that would permit more US citizens, even those with serious health problems, to obtain affordable healthcare premiums. The proposals, approved by America’s Health Insurance Plans (AHIP), would make it harder for insurance agencies to cancel or deny coverage to people with pre-existing medical conditions, while simultaneously limiting the premiums that could be charged to those people.
The proposals are meant to address the 47 million Americans without health coverage and reflect a readiness among insurers to extend coverage beyond the healthiest Americans. Nevertheless, AHIP still recommends that states cover the most costly individuals while private insurers offer policies to everyone else.
Political analysts regard the AHIP proposals as an attempt to counter mounting political pressure from Congress and Democratic presidential candidates. The move is also a means of maintaining relevance in any state legislative processes in order to prevent another highly regulated approach like that adopted in Massachusetts. States, however, are not likely to accept the proposals given the high cost of insuring the least healthy Americans.
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Docs Spared Medicare Cut by the Senate
Source: Wall Street Journal
Date: 12/19/2007
Physicians will likely evade a Medicare pay cut for January 2008 after the Senate approved a deal to table a 10.1 percent pay reduction. Instead of a Medicare cut, physicians will receive a 0.5 percent pay raise ($6 billion) from Medicare and the matter will be postponed for six months until the summer of 2008.
The temporary Medicare pay package still requires approval from the House and the President’s signature, both of which are likely to happen.
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Credentialing, Licensure, Quality Management
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U.S. Lags in Halting Preventable Death
Source: WebMD Medical News
Date: 01/08/2008
Of the 19 industrialized countries surveyed for a recent study, the United States was the worst at stopping preventable deaths from occurring in people under the age of 75. If its preventable death rate matched or was comparable to those of top-ranked countries, the study concludes that the U.S. may have been able to spare an estimated 101,000 deaths annually. Not only did the U.S. receive the worst ranking in the survey, the study also showed that the country has the slowest rate of improvement.
Using data that had been compiled by the World Health Organization, the researchers compared the preventable death rates of 19 countries between 1997-1998 and 2002-2003. The study defined preventable deaths as deaths in “people younger than 75 with treatable cancers, bacterial infections, diabetes, stroke, heart disease, and surgical complications.” The figures from 1997-1998 show that the United States was not the worst country in halting preventable deaths, but because of very little improvement in this category, the U.S. fell into the last position by 2002-2003. In that span, the United States only improved by a 4% rate of decline, compared to the 16% average rate of improvement in the other countries.
Here is the full list of how the 19 countries ranked in their preventable death rates for 2003-2003:
1. France
2. Japan
3. Australia
4. Spain
5. Italy
6. Canada
7. Norway
8. The Netherlands
9. Sweden
10. Greece
11. Austria
12. Germany
13. Finland
14. New Zealand
15. Denmark
16. U.K.
17. Ireland
18. Portugal
19. United States
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Stricter Requirements Sought for Relicensure as Medical Boards Draft Proposal
Source: American Medical News
Date: 12/31/2007
State medical board leaders are considering plans to augment requirements for the maintenance of physician licenses. In most states, physicians can presently maintain licenses by avoiding disciplinary actions and by completing a minimum number of hours of continuing medical education. The Federation of State Medical Boards (FSMB), however, is now considering new requirements that would render the continuance of physician licenses a process similar to the maintenance of specialty certificates.
According to a draft report issued in November by FSMB, the federation recommends that physicians applying for relicensure participate in self-evaluation and practice assessment, demonstrate continued competence in areas like patient care and medical knowledge, and complete exams in practice areas.
Physicians have challenged the proposal as an unnecessary duplication of the specialty board certification process, which already demands medically specific knowledge. The new requirements will be voted on at the FSMB House of Delegates in May 2008. Public comments are accepted on the proposal until January 7, 2008. The final report will be submitted to the federation’s board in February of next year.
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Fight over Physician Quality Ratings Moves to Massachusetts
Source: American Medical News
Date: 12/31/2007
Group Insurance Commission (GIC), the Massachusetts state employee health insurance program, recently mandated a tiered system of physician rankings to imitate the model used in New York state. In November, GIC began accepting proposals from health plans to create networks covering 250,000 state employees and potentially another 330,000 municipal employees.
In April, the commission released its first network-based physician quality ratings. But, amidst the expansion of the GIC network, physician unrest spurred the Massachusetts Medical Society (MMS) to condemn the commission’s tiered networks. Allies of MMS included state legislators supporting House and Senate bills that would govern standards for tiered network and BlueCross BlueShield of Massachusetts, which refused to submit a plan proposal to GIC.
According to physicians in the state, the GIC health plans sent notices to physicians informing them of their ranking. The notifications offered no explanation or opportunity to appeal the rankings, which are based largely on cost of care instead of quality of care.
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Study Finds Gaps between Doctors’ Standards and Actions
Source: The Washington Post
Date: 12/04/2007
A study funded by the Institute on Medicine as a Profession published in the Annals of Internal Medicine uncovered notable gaps between physician ideals and practice, particularly in the areas of self-regulations, financial conflicts, and conserving limited resources.
Nearly half of all physicians do not report incompetent or impaired colleagues even though 96 percent agree such people should be reported. Moreover, nearly half failed to report at least one serious medical error they observed.
Researchers found large gaps between physicians’ adopted attitudes and what they actually practice. They agree that failing to report incompetent physicians affects the welfare of patients and should be brought to their attention.
The study's authors and a panel of experts said that not all the findings were negative and that some must be understood in context. For instance, the fact that doctors nearly unanimously agree on standards means they do not need to be convinced that these issues are important.
However, the experts agreed that physicians are trying to do the right thing and note that a renewed focus on professionalism, not simply more regulation, is necessary.
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Can Patient Flow Analysis Reduce Patient Wait Times?
Source: BMC Health Services Research
Date: 01/01/2007
A study published in BMC Health Services Research utilized patient flow analysis (PFA) techniques at two clinics to identify inefficient areas of the care process and measure intervention effectiveness, with results suggesting that PFA is a valuable tool in increasing the efficiency of hospitals.
The experiment first observed the normal routine of two clinics, one handling chronic pain and the other devoted to anticoagulation. The study’s authors performed a patient flow analysis on both clinics and devised interventions meant to improve the flow of both clinics by eliminating redundancies and restructuring inefficient elements. Interventions involved the relocation of laboratories, the restructuring of nursing staff, and the inclusion of increased numbers of clinical support staff in the anticoagulation clinic. In the chronic pain trials, the researchers altered policy to improve clinic triage, moving paperwork review issues to the beginning of the visit and allowing patients to get to see a doctor faster.
Results suggested that the PFA and interventions led to sizeable decreases in patient wait time. The chronic pain clinic showed a mean visit time that was 25 minutes shorter than before the PFA. The anticoagulation trial resulted in a 39 minute (66%) reduction in total visit time for patients.
The study’s authors believe that their results evince the efficacy of Patient Flow Analysis as a corrective tool for hospital organizations. They contend that PFA can function as an effective substitute for outside consultants, allowing clinic staff familiar with patient care processes to develop a greater sense of ownership, aiding in the resolution of problems and improving the clinical experience for all involved.
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Illinois-Based Health System Brings EMR to Community Physicians
Source: Healthcare IT News
Date: 01/07/2008
Provena Health has developed plans to provide an electronic medical records system (EMR) to its affiliated physicians. The 1,800 physician health system in Illinois and Indiana will host Misys EMR and Misys Tiger practice management software from Provena Saint Joseph Medical Center in Joliet, Ill. Provena is hosting EMR software as a way of encouraging a widespread adoption of EMR among its affiliated physician group (Alliance Health), as well as to cut costs associated with implementation and support.
The Misys software products being utilized by Provena Health are provided by Misys Healthcare Systems based in Tampa, Fl. In addition to the EMR for physician practices, Provena Health has also purchased Misys Homecare, which the Catholic Health System will use among its network of home care nurses. Alliance Health also intends to implement Misys Payerpath software designed for billing and transactions. Such an integrated system would enable physicians to more precisely document care delivery and any subsequent results. This system will also prepare them for pay-for-performance initiatives.
Provena is a health system that operates out of Illinois and Indiana and “includes six hospitals, 16 long-term care and senior residential facilities, 28 clinics, five home health agencies and other health-related activities.”
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Cancer Patients Gain from Reporting Symptoms Online
Source: Health Day News
Date: 11/30/2007
A study published in the Journal of Clinical Oncology by researchers from the Memorial Sloan-Kettering Cancer Center suggests that having cancer patients report to doctors on their symptoms and side effects online may improve their care.
As cancer care becomes increasingly complex, office visits become more compressed, making it challenging for clinicians to assess and classify symptoms. Furthermore, cancer therapies are highly toxic, so early detection and timely treatment is vital. Researchers agree that the online self-reporting option is beneficial because it allows all patients, even the sickest, to alert clinicians to crucial symptoms in real time.
The study assessed over a hundred lung cancer patients that were presently receiving outpatient chemotherapy. These patients were provided access to a secure Internet patient reporting system referred to as Symptom Tracking and Reporting (STAR), which was developed by researchers at the Memorial Sloan-Kettering Cancer Center. Patients were able to use computers in waiting room kiosks and at home to report cancer symptoms and chemotherapy-related side effects. The study found that 98 percent of patients found STAR easy to use, 90 percent said it was useful, and 77 percent believed it improved the quality of their discussions with clinicians.
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Minnesota Insurer’s Web Sites Allow Members to Post Comments About Physicians
Source: Medical News Daily
Date: 12/19/2007
Multiple Minnesota health insurance companies have launched websites that encourage consumers to post comments regarding their experiences with healthcare providers in the insurer’s networks.
The sites include BlueCross BlueShield of Minnesota’s healthcarescoop.com, Medica’s mainstreetmedica.com and Health Partners and Preferred One. The ability to post comments is part of a statewide effort by Minnesota’s healthcare organizations to provide information to consumers of healthcare. The Minnesota Department of Health condones the action as a way for physicians to gauge patient satisfaction.
An executive from BlueCross BlueShield Minnesota says that the decision to post consumer comments stemmed from prospective patients who wanted ratings and descriptions of actual patient experiences with network doctors.
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