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Facility and Health Insurance Perspectives

Joel L. Nitzkin, MD, MPH, DPA

IEEE-USA Geriatric Technology Symposium

Falls Church, VA

June 4, 2004

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Outline of Today’s Presentation

• Introduction

• Perspectives– administrators, healthcare staff, etc.

• Issues– costs, benefits, etc..

• Conclusions– suggestions to accelerate and expand technological innovation in

healthcare for seniors

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Introduction• Health administrators decide

• Health insurers pay

• Multiple internal constituencies

• Negative bias toward technological innovation well founded

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Perspectives• Regulators (primarily state government)

• Accreditation/QA Certification– NCQA/HEDIS (National Committee for Quality Assurance/Health Employer Data Set)– JCAH (Joint Commission on Accreditation of Healthcare Organizations)

– URAC (Utilization Review Accreditation Commission--American Accreditation HealthCare Commission)– (other)

• Insurance Carriers– CMS: Medicare/Medicaid and Other

• Facility– board of directors (or legislature)– administration– finance– marketing– physicians– nurses and other health professional staff– (all claim to represent patients/community)

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Perspectives• Each constituency has its own perceptions, values and

priorities

• Any one constituency can veto a proposal

• All involved must collaborate if innovation is to succeed

• What is favored by one constituency is likely to be opposed by others

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Issues

• Priority/Urgency

• Costs

• Benefits

• Odds for Success

• Barriers to adoption and success

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Priority/Urgency• Required by regulatory agency or payer

• Needed for quality assurance credential

• Reduce cost

• Improve clinical outcomes

• Impact on community image of hospital or clinic

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Costs• Fixed vs. variable costs

– capital improvement– administrative overhead– direct/indirect

• Who pays – and for what– insurance carrier (capitation vs. fee for service)– facility– other

• Determinants of cost• Non-dollar costs

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# 1 Determinant of cost• Patient need/patient selection (home monitoring)

– number of patients determine cost per patient– based on combination of medical and behavioral factors

• some will do well with instruction, but no expensive devices• some will not be able to effectively use monitoring equipment• only those in the middle-range of behavioral capabilities will benefit

from the marginal expense of the expensive devices

• Neither the medical records nor the medical staff can objectively sort their patients into these three groups

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Other Determinants of cost• Program staffing

– FTE required– staff training– oversight/supervision

• Data systems needed to track utilization, costs and benefits• “Build” vs. “Buy”• Adverse consequences

– costs– patient outcomes– liability issues

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Non-dollar costs• Control/discretion

• Patient satisfaction

• Physician satisfaction

• Community image of healthcare system

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# 1 Determinant of Benefit Estimate of what would have occurred without the new

technological innovation

• Outcomes, cost, medical errors, etc.

• Easiest at time of initiation of program

• All but impossible after the program has been in place for more than a year

• Enrollment, physician behavior, patient behavior and healthcare policy constantly changing -- all of these also impact outcomes

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Benefits• Patient outcomes

• Impact on healthcare costs

• Non-dollar benefits– control/discretion

– patient satisfaction

– physician satisfaction

– community image of healthcare system

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Odds for Success

• Simple replacement – (teleradiology for conventional radiology)

• Add-on – (home monitoring systems)

• Change the way business is done– electronic medical records– telemedicine

• Risks of veto and failure increase exponentially with the number of constituencies that must adopt the new innovation

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Barriers to Adoption and Success• Quality and objectivity of empirical evidence• Squishiness of projections

– what would have happened without the intervention• Perceptions

– not my/our job– control/discretion– patient satisfaction– physician satisfaction– community image of healthcare system

• People• Dollars

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Conclusions and Suggestions

• Advocates need to understand perspectives and issues• Vendors and manufacturers need to address

– evidence– perspectives– issues– odds for success– barriers

• Use of DM firms, consultants and other intermediaries• Major role to be played by national organizations

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Major Role to be Played by National Organizations

• Advocate for legislation, regulation and quality assurance guidelines

• Educate their internal constituencies as to the issues noted in this presentation

• Assist manufacturers and vendors – identify markets within the world of healthcare delivery– assist in design of products that will better meet the needs of

healthcare constituencies• Provide a venue for (relatively) objective research

– to demonstrate the value of each type of innovation and – to clarify the conditions required for successful implementation.

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Contact Information

Joel L. Nitzkin, MD, MPH, DPA

JLN, MD Associates, LLC

4939 Chestnut Street

New Orleans, LA 70115-2941

phone: 504 899 7893 or 800 598 2561

cell phone: 504 606 7043; fax: 504 899 7557

jln@jln-md.com

www.jln-md.com