Payers & Providers Midwest Edition – Issue of October 11, 2011

8/3/2019 Payers & Providers Midwest Edition Issue of October 11, 2011

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A new survey from the Midwest BusinessGroup on Health has found that manyemployers have only a vague understanding ofthe role of specialty pharmaceuticals in

driving up employee benet costs.About one quarter of employers have little

or no understanding of specialty pharma, and53% have just a moderate understanding, thegroup discovered.

Specialty drugs are tricky to dene but thecoalition has identied them as a high costdriver for healthcare. The category usuallyincludes biologics (derived from livingorganisms), injectables, infusion drugs, andparenterals. Specialty pharma products maybe used to treat diabetes, rheumatoid arthritis,auto-immune disorders, HIV infection, cancer,growth hormone disorders, and Crohns

Disease.There is a tsunami coming at employers,

said Cheryl Larson, the vice president of theChicago-based business coalition who led thesurvey. Theyre hearing about it but theyrefocusing on healthcare reform.

Take an employee with hemophilia, forexample. There are not a lot of hemophiliacsin the world, but having one in your employeegroup can dramatically raise your pharmacosts, Larson said in an interview. The costcan range from $2,000 to $350,000 annually,and there is a huge gap between what itscosting the employer and employee. Usually,

there is no generic equivalent for specialtymedications.

Most of the respondents to the survey wereself-insured employers, she said. They are

focused on medical benets, not so much onpharmacy benets. They are relying on theirhealth plan or pharmacy benet manager tomanage this, and that might not be in theirbest interest, Larson said. They need adisinterested party to help them navigate this.We know we cant reduce the cost, but wehave ways to manage it.

The Midwest Business Group wants tocreate resources and tools to help employersmanage these exploding costs, includingworking with vendors, health plans, and PBMsto make sure theyre contracting appropriatelyand designing the benet plan to reward

patient compliance.We know we cant impact the cost of

specialty drugs right now, but we can impactthe people who are on them, by removingbarriers to compliance, Larson said.

With chronic, incurable lifetime diseases, aconsistent medication regime can sometimeshalt the progress of the disease and help thepatient in daily functioning. The medicationsare so expensive that lapses in compliance area signicant waste of money and may causethe patients health to deteriorate, leading tomore expensive treatments. Some people


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In Brief

Wisconsin GovernorCreates OIG for Fraud

Prevention in Medicaid

Wisconsin Gov. Scott Walker hascreated a new Ofce of the InspectorGeneral to improve fraud preventionefforts in the Department of HealthServices. The ofce will centralizeefforts to ght fraud that are housedwithin separate programs in thedepartment.

The DHS runs several of the statesmajor public assistance programs,including Medicaid, FoodShare, theWomen, Infants and Children (WIC)supplemental food program and thestate supplement to SupplementalSecurity Income (SSI). The programshave a two-year budget worth $14

billion and serve 1 million people inWisconsin.

The director of the new OIG will beAlan White, who served 13 years asWisconsin Bureau of Program Integritydirector, which works againstMedicaid fraud.

The 2009-11 biennial budget adds$2 million and 19 positions to preventfraud.

Indiana Report CitesHigh Percentage of

Children on Medicaid

An estimated 60.5% of all childrenunder six in Indiana are served byMedicaid, according to a recent report,The State of the Young Hoosier Child.

The report, by the Maternal andChild Health Division at the IndianaDepartment of Health, is designed toshine a spotlight on indicators of

Continued on Page 3

NEWS

Specialty pharma costs (Continued from Page One)

have cultural views, or their own view, on whythey should or shouldnt continue taking amedication, she said.

In general, pharmaceutical costs have beendeclining for health plans and employers asmore drugs have moved off patent in recentyears. When Mercks Zocor, a statin, went offpatent in 2006, it saved insurers billions ofdollars as physicians switched patients to

generic equivalents. Many employers havemoved to tiered benet plans to rewardpatients for using lower-cost medications.

Some employers are embracing value-based pharmaceutical plans, which maywaive copays and supply costs related todiabetes products, for example, in exchangefor the employee agreeing to meet regularlywith a trained diabetes counselor.

Mark Hagland, editor ofMedical

Informatics, who attended the presentatioHHS is inviting developers to create napplications that leverage the data. AtChallenge.gov, HHS is sponsoring a seriecontests among innovators and developewith prize money and publicity for creatithe most interesting applications.

On June 9, it held what Park called aDatapalooza, or Health Data

Inititiative, in Bethesda, Md.,where teams of innovators bunew applications from scratcha matter of hours.

One such contest, the Life

Facebook Application Challenasks designers to create anapplication so that people indisaster areas have threelifelines on Facebook to helthem recover and declare thewhereabouts.

Or take the Blue Buttoninitiative atwww.myhealth.va.gov. Launca year ago, the program allowveterans, Medicare beneciaror military beneciaries to

download an electronic copy of their ow

personal health or claims data, and sharewith their providers.

Park was the co-founder ofAthenaHealth, a health IT company, andbefore that a consultant at Booz AllenHamilton. He spoke to about 300 attendeat client conference sponsored by MergeHealthcare, which develops imagingexchange products for providers.

Parks vision of HHS as facilitator andincubator of innovation is one that I belimost in the industry would welcome, if itbe executed successfully, Hagland said.

The Department of Health and Human Services

is moving toward an information liberationstrategy that will become the greatestentrepreneurial opportunity since the Internet, atop department ofcial said in Chicago last week. Todd Park, chief technology ofcer for HHS,said he joined the government in 2009 to help itsleadership harness data, technology andinnovation to improve public health and thehealthcare delivery system.

He aims to turn HHS into theNOAA of healthcare, he said.The National Oceanographicand Atmospheric Admin-istration provides the raw data

that powers a new industry ofweather and climate information,such as AccuWeather and TheWeather Channel. By making itsdata instantly available indownloadable formats, Park said,this branch of governmentactually propels private sectorinnovation, employment, andeconomic growth.

HHS intends to do thesame with health information.Park said the departmentwants to start publishing all new health data, and

will make existing data more accessible. Thisincludes community health data, includingprovider directories and quality data, as well asMedicare claim les for provider qualitymeasurement, consumer product information,medical and scientic data, and governmentspending gures. More details about the programare available at www.data.gov/health.

What is signicant here is that Park and hiscolleagues recognize that HHS needs not only tomanage processes, but also to lead, and to leadwith a vision of the future, one that fully engagesproviders as partners in creating that future, said

Todd ParkHHS Technology Chief

HHS Seeks Information LiberationChief Technology Officer Encourages Innovation


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NEWS

In Brief

childrens health that inuence theirfuture wellbeing.

Just over 2 out of every ve babiesborn in Indiana are born to women onMedicaid.

Infant mortality for black childrenin the state is 2.4 times higher than fornon-Hispanic whites. Likewise, black

infants are four times as likely to diethan other racial groups fromcomplications related to lowbirthweight. African-Americans havethe highest rate of low birthweightbabies: 13.9%, compared to whites at7.7%.

Michigans Blue Careto Refund $7.3 Million

to Small EmployersDue to Cost Decline

The Blue Care Network in Michigan,the states largest commercial healthplan, will refund 2.5% of billedpremiums to employers becausemedical expenses were lower thanexpected this year.

The total refund amounts to $7.3million, which will be distributed to5,200 small businesses.

Blue Care, an HMO product ofBlue Cross Blue Shield of Michigan,also said it will raise premiums by6.7% in the rst quarter of 2012 forsmall-group employers of fewer than50 people. That would be the lowestpremium increase in four years. The

insurers increases were 8.3% in 2009,10.9% in 2010, and 9.9% in 2011.

The Blues work every day toprovide quality healthcare coveragewhile balancing costs, said KevinKlobucar, Blue Care president. Weprovide products that encouragehealthy behaviors, programs thatpromote preventive care and wellness,and networks of high-quality doctorsand hospitals. This approach isworking and translates into lowercosts for Michigan businesses.

The prestigious Institute of Medicine lastweek recommended that costs be taken intoaccount when the Department of Health andHuman Services determines what should beincluded in a basic health plan offered for saleon a health information exchange.

The IOM, which is independent of thegovernment, suggested that the typicalpremium shouldnt cost more thanbenchmarks set by the department. The IOM

report doesnt list benets but advises thegovernment on how to go about determiningwhat should be covered. A small-employerplan should be the model, the IOM said,because large employers typically offer richebenet packages that may be too expensive.

The health reform law of 2010 obligeseveryone to purchase health insurance or patax penalties. The IOM said the basic benepackage should be dened by May 1, 2012.

Federal authorities arrested an Indiana attorney

in Florida last week and charged him withaiding his client in evading paying penaltiesinvolved with the Edgewater Hospital scandalin Chicago. Frederick M. Cuppy, 70, of Fort Lauderdale,was charged in a 10-count indictment withperjury and obstruction of justice. Cuppyrepresented Peter G. Rogan, former owner ofEdgewater Hospital and Medical Center on theNorth Side of Chicago. The hospital wasshuttered in 2001 and went into bankruptcy ayear later after federal and state agenciesuncovered an elaborate Medicaid andMedicare fraud scheme based at the hospital.

Rogan was not charged criminally but wastried in a civil lawsuit alleging that he wasresponsible for the submission of millions ofdollars of false claims. After a bench trial in2006, Rogan was ordered to pay $64,259,032.The judge found that Rogan testied falsely,destroyed documents, and obstructed justice.

The bank that provided Edgewater nancing,Dexia Credit Local, was awarded a judgment of$124 million after a civil fraud lawsuit against

Rogan.

The government went after Rogans assetsbut they were hidden in a trust in the Bahamthat Cuppy helped him set up, the indictmensaid. Between 2002 and 2010, Rogan andCuppy conspired to obstruct justice in boththe governments case and the Dexia case. Ttrust paid out more than $11 million to Rogaand his wife between 2002 and 2006, said tU.S. Attorneys Ofce for Northern Illinois.

In 2006 Rogan led an afdavit with thecourt in which he declared he had no controover the trust. The indictment said that inreality Rogan did control the trust and itsdistributions.

Cuppy has been indicted for misleading tcourt by testifying under oath that he had noauthority to instruct the trustee about how todispose of the assets and that had nothing todo with the trustees payments to Rogans w

Rogan and his wife, formerly of ValparaisInd., are living in Vancouver, British ColumbIn 2008 he was detained on entering Canadaafter a trip to China, but appealed the deniaof admission. He is free on bond.

Indiana Lawyer Arrested in FraudCharged in Edgewater Hospital Medicaid Case

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Payers & Providers Page

Perioperative services can contribute as muchas 40% of total hospital revenue. Therefore,optimizing this resource is essential.

The management of operating roomoperations is typically a data-driven enterprise with closetracking of metrics, such as starttimes, turnover time, roomutilization, and other data tomaximize resource utilization.However, this approach is notsufcient to optimizeoperations.

There is a complexinterconnection of personnel,specialized space, equipment,and scheduling that must becoordinated concurrently tomake ORs function at peakefciency.

Scheduling is at the heart ofperioperative efciency becauseit impacts the rooms that areopen, the staff paid to operatethose rooms, the amount ofspecialized equipment needed,and the necessary personnel in

the pre-operative and post-operative departments to carefor these patients. Managing theperioperative schedule has thepower to not only improveperioperative efciency but canalso impact utilizationthroughout the hospital.

A successful method tomanage the perioperativeschedule is schedulesmoothing. This process can be dened asaligning the elective surgical cases with theresources available to support the patients

during the post-surgical course. Schedulesmoothing involves gathering key OR metricsover a six to twelve month period by casevolume, type of surgery, minute(s) per case,turnaround time per case, and personnel andequipment needed by case type.

Each case should be pre- and post-operatively evaluated in the context ofpersonnel work hours, required bed type, andlength-of-stay. Average case times arecalculated by day of week to determine thetotal OR time needed.

The cases are then reviewed, and the post-procedure care requirements are quantied bstage of recovery time, inpatient bedrequirements, specialized care needed, and

average LOS. This data is used todetermine bed availability, personneeded, and revenue per case by of week.

The subsequent data is matchewith ambulatory surgical bedavailability, target inpatient unitaverage census, and dischargingdiagnosis to determine the availa

of resources each day. A total coper case including personnel houthen calculated to determine if thpost-operative personnel and sparequirements are aligned with thecases scheduled.

The process to transition to asmoothed schedule requires morthan just calculations. Surgeon bin is essential to the process andrequires their early involvement ithe planning and data-analysisprocess. Surgeon and staffengagement in combination with

computer modeling of smoothedschedule variations allow ORmanagers to control the case owmore effectively. This results inhigher room utilization, personne

expenses savings, and the eliminatof bottlenecks that surrounschedule peaks and valley

Schedule smoothingbenets are optimized whimplemented for every

elective case on the OR schedule. Choosing services with a high level of service intensity fthe initial phases facilitates enterprise-wide

involvement and provides the greatest revenuimpact.

OPINION

Perioperative Schedule SmoothingA Strategy to Raise Efficiency in the OR Suite

By Bonnie Barndt-Maglio

and W. Richard Goddard

Bonnie Barndt-Maglio is a vice president an

W. Richard Goddard is a consultant with Th

Camden Group.

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Payers & Providers Midwest Edition – Issue of October 11, 2011