Healthcare Policy Conference Notes
BY LAING RIKKERS, JUNE 30, 2005
Greetings from the SG Cowen and ISI Health Care Policy Conference in Washington D.C. It's been a full day covering Medicare, Medicaid, FDA, Specialty Hospital Policy and Gainsharing. We've heard from Representative Pete Stark (D-CA) and Senator Debbie Stabenow (D-MI), as well as leaders from industry and government agencies.
A few themes have stood out from the rest:
1. Gainsharing is gaining momentum. Joane Goodroe, a leader in the gainsharing arena, spoke about how the Office of Inspector General (OIG) has issued her hospital clients 7 positive opinions on the program she created. She spoke about bringing doctors into the decision-making process about hospital spending. Why? Without a clinical perspective, hospitals could never make good cost-saving decisions. Like trying to save money on the redesign of an car engine without input from someone who knew how to build engines, she said.
She was joined by Albert Shay, an attorney, who reviewed the three statutes in the gainsharing debate. 1) Anti-kickback law 2) Civil Monetary Payment law and 3) Stark laws. The OIG's advisory opinions address the first two, but OIG technically cannot comment on the Stark laws for lack of authority. He argued, however, that it is doubtful that OIG would have published 7 favorable opinions if they thought that an exception couldn't be identified in the Stark laws. In his words, "It would be a great disservice to industry."
Finally, Alexander Vachon, a Washington insider and consultant reminded us that OIG is the police force (badges, guns and all), whereas Congress and CMS are the policy makers. A good reminder of who's who for those of us who don't live and breathe in Washington.
He also said that CMS and Congress support gainsharing, and that CMS is in effect already practicing gainsharing through their pilot of Value Based Purchasing. He seemed more confident about the sentiments of Congress and CMS than anyone else we've heard on the matter... then again, he's the insider.
2. Pay-for-performance is a hot topic. We heard about it both from CMS and Karen Ignagni, President of America's Health Insurance Plans (AHIP), representing commercial payers. The message is that with limited dollars for healthcare, payments should be differentiated based on quality of care. Any easy idea to endorse, sure, but the trick is defining the quality. Commercial payers are working with AMA to decide on metrics and measurement and it's a great idea, just difficult to implement because doctors resist rating one another. Stark also noted the implementation challenges.
3. Healthcare IT system standardization was all the rage. The topic was raised more times than any of us could count. Stark, Stabenow, and Ignagni all discussed the benefits ranging from patient record portability, to efficiency, to reduced administration, to cost savings potential. It seem to be the only topic in healthcare that both sides of the aisle can agree on at the moment.
4. The future of Specialty Hospitals is still murky. The conversation centered around the unclear definition of a hospital, the inconsistencies in the Stark rules and regulations, and whether or not people are comfortable with the concept of self-referral.
I asked the panel whether orthopedic practices were moving out of acute care hospitals because they were more profitable since we had heard that ortho profits for hospitals were declining. Keith Pitts, Vice Chairman of Vanguard, an acute care hospital company avoided the question. John Rex-Waller, President and CEO of National Surgical Hospitals, a specialty hospital group, said orthopedic specialty hospitals aren't created to make more money for the doctors, but rather to create an easier and more convenient place to practice where nurses are happier. Well, then he did get back to saying that by not competing with emergencies for OR space surgeons could do twice as many surgeries and make more money. $$$ Interestingly, no one has ever mentioned that an advantage of an orthopedic specialty hospital is that it takes otherwise healthy patients out of an environment full of pathogens.
A few final notes:
- Stark said to read MedPAC reports for guidance on what Congress will do because they trust the bipartisan group's research.
- Stark also said Republicans are doing their best to make sure Medicare is not an entitlement in the future.
- There is growing sentiment that doctors should understand the economics of medicine and the financial implications for their decisions.
- Everyone agrees the DRG system is broken, but what it will be replaced by and the timing of revision is unclear.
