Most of the enormous changes to the

healthcare delivery system are

following the belief that traditional

providers will need to reorganize and

assemble themselves into some form

of accountable care organization.

For the most part these changes are

driven by CMS and the Affordable

Care Act. But consider it also

reflects a traditional “build it they

will come” thought process that is

not necessarily reflective of human

behavior in the market place.

One lynch pin of the systems

transformation is the Primary Care

Medical Home (PCMH); a redesign

of how a primary care physician

practice will interact with their

current patients to monitor and

maintain health. This is an

outstanding concept that prepares

practices for being paid for outcomes

or for success under capitation.

The PCMH focus is to effectively

deal with patients who have chronic

illnesses and are traditionally high

cost to the system. It also puts

primary care physicians squarely in

the position of managing more

complex and chronic patients, a

departure from coughs, colds, aches,

pains and shots.

Meanwhile elsewhere, Walgreen’s

(TakeCare Clinics) and CVS (Minute

Clinics), Rite Aid (NowClinics) and

some health systems are rapidly

building new capacity across the

country to respond to patients who

have immediate but non emergent

needs.

These clinics are staffed with mid

level providers who are supervised

by Physician medical directors

depending on State regulations. All

have posted rates for their care,

collect payment at time of service

and many also accept payment from

insurance companies. What is

happening here is that they are

responding to an informed consumer

who is less inclined to wait in a

doctors office for simple care and is

learning that to go to ED can

personally cost them more.

“Care is being leveraged down to

the lowest cost provider”

From 1991 to 2010, 3.27 million

patients ages 65 and older had total

knee replacements and 318,563 had

knee revisions, additional surgery to

f i x p rob l ems . Th e J AM A

researchers found the number of

primary replacements among

Medicare patients increased from

93,230 in 1991 to 243,802 in 2010

(an increase of 161.5%). The

number of revisions increased from

9,650 to 19,871. Total knee

replacement surgeries increased

99.2% (31.2 procedures per 10,000

Medicare enrollees in 1991 to 62.1

procedures per 10,000 in 2010.) Journal of the American Medical Association.

Disruptive innovation (already) to primary care?

Getting the attention of your Business Associates

The watchers of the HITECH law are

entering a new phase of enforcement

of the many Business Associate (BA)

agreements and the HIPAA Regs.

For every provider and covered

entity there are a dozen or more

BA’s. These BA’s are the many

organizations that provide support in

some form to the healthcare delivery

system and these numbers go beyond

those who have access to protected

health information (PHI).

Covered providers are at risk for the

behavior of these BA’s and

according to the HHS, more than

50% of the breaches reported were

caused by BA’s.

In many cases the BA’s lack any

sophistication in managing the

responsibility being thrust upon

them (eg: cleaning companies or

small marketing businesses) and

get little oversight from the

covered providers with whom they

have working agreements.

What then, can providers (covered

entities) do to protect themselves

from exposure to risk of breach by

BA’s? Take time to revisit the

issue:

Meeting with principals to

negotiate, understand and sign

an updated BA agreement.

Ensure there are c lear

expectations for compliance.

Clearly spell out responsibilities

for breach notification.

Ensure the BA’s educate their

e m p l o y e e s r e g a r d i n g

compliance

The law does allow some

flexibility for the compliance to be

scalable based on the associates

resources.

Lund Byrne Associates

Spring 2013

Management Update

Contents in a

Nutshell:

Walk-in Clinics will

be disruptive to

traditional and

PCMH Model

primary care

Business Associates

must understand

their responsibilities

Cleveland, Ohio is a

growing center for

Bio-Innovation

Health Insurance

Markets 2014 will

be delayed and have

low reimbursement

Helping Physicians and Hospitals to Collaborate

Knees

22747 VINE COURT : SUITE 100 : ROCKY RIVER : OHIO : 44116 : (440) 333-2921 : www.lundbyrne.com

Physician

Shortages?

“Physicians are

in a position to

create their own

demand.”

Eli Ginzberg, 1966

Economist

Please direct all questions

and inquiry's to:

arbyrne@lundbyrne.com

440-333-2921

www.lundbyrne.com

The majority of States have opted to

allow the Federal Government to set up

and operate the mandated Health

Insurance Exchanges. (aka Insurance

Markets) Why? Political issues aside,

most likely because of the expense and

the short amount of time needed to get

them up and running. The ACA plan

calls for patients to be able to register on

October 2013 and the overage to begin

January 2014. We believe these dates

will be extended.

Still, with an anticipated 30 million

people being added to the health

insurance market, healthcare providers

must understand and prepare for the

impact of the Insurance Market

Exchanges.

Providers should review their managed

care contracts, which will probably be

getting amendments and some of the

agreements may not apply in any way to

the new products that plans will offer

after the exchanges go into effect.

Providers must also examine the

proposed rates and fee schedules and

determine what services will be covered

by the exchange products. Be ready also

for new insurers to enter the market to

compete for the patients. More insurers

in the market means more administrative

overhead.

Nationally, the expected 30 million will

gain coverage but it is hard to nail this

down to how it will impact specific

markets. Also, it is not clear who the

newly covered people will be. How

many of them will have opted out of

employer plans or be dropped from their

employer health plans and end up in

Market plans at potentially lower

reimbursement rates for providers?

It is anticipated that insurers offering

plans through the Markets will be

pressured to keep premium costs low. In

turn, we expect that this will result in

lower provider reim-

bursement for those

patients enrolled in

these plans.

For acute care providers, there are many

questions still remaining that could

significantly alter their bottom line.

Assuming that that reimbursement

will be less through the Insurance

Exchange Market it is not unreason-

able to expect them to be as low as

Medicare or Medicaid.

The projected bounty of increased

provider volumes and changes to payer

mix could have a negative affect on

providers unless they quickly prepare

for and adapt to the new payment

models.

Refer to the experiences from

Massachusetts by the Kaiser Family

Foundation:

h t tp : / /www.kff .org/heal th reform/

upload/8311.pdf

Lund-Byrne Associates

Permanent tenants include: Philips

Healthcare, GE Healthcare, Johnson

Controls, University Hospitals of

Cleveland and the Cleveland Clinic.

The most recent and largest tenant will be

Healthcare Information and Management

The new Global Center for Health

Innovation (previously known as

Medical Mart) is part of a $465 million

convention complex that aims to be a

permanent showroom of medical,

surgical and hospital goods. It will also

offer continuing education courses for

doctors and hospital administrators and to

highlight advances in medical

technology.

One of the goals of the project to

capitalize Cleveland's reputation as a

world class medical center by bringing

medical shows and conventions to the

city.

Systems Society HIMMS). The health

care IT organization located in Chicago.

They will take over an entire floor.

Cleveland, Northeast Ohio and its health

related industries continue to invest

heavily into making the region a center

for bio-innovation. A company named

BioEnterprise has been formed by a joint

venture between most local health

systems, area universities, NASA and

some private sector biotech companies.

A Global Center for Health Innovation in Cleveland, OH

“Be careful about

reading health

books. You may die

of a misprint.”

Mark Twain

22747 VINE COURT : SUITE 100 : ROCKY RIVER : OHIO : 44116 : (440) 333-2921 : www.lundbyrne.com

Health Insurance Exchanges (Markets) in 2014?