Medicare payment increases expected, R_x drug benefit less certain

The Senate Finance Committee is reportedly working on legislation that would reverse the 5.4 percent cut in physicians’ Medicare payments that took effect in January. A similar measure, which also provides increased funding for hospitals, home-health agencies and Medicare+Choice plans and establishes a Medicare prescription drug benefit, has already been passed in the House (HR 4954). There is some skepticism about the Senate bill including a prescription drug benefit, however, given that the Senate has defeated four prescription drug benefit bills brought before them, most recently in July following three weeks of debate. “It would be awkward, to say the least, to help hospitals and doctors and not help the beneficiaries,” said Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee, in the Sept. 8 New York Times.

Centers for Medicare & Medicaid Services Administrator Tom Scully, speaking last month at the American Association of Health Plans’ Medicare and Medicaid Conference, said drug coverage for seniors is the Bush administration’s top health priority and urged the Senate to take action on this issue first. He admitted, however, that Congress should fix the “glitch” in the Medicare payment formula that resulted in the 5.4 percent payment cut this year. “If you want doctors to provide good care, you have to pay them reasonably,” he said. “The current policy is not reasonable.”

Physician productivity jumps; compensation rises slightly

Median annual compensation for family physicians rose slightly more than 1 percent in 2001, to $146,601, according to the Medical Group Management Association’s Physician Compensation and Productivity Survey: 2002 Report Based on 2001 Data. In comparison, income for all primary care physicians rose 1.21 percent to $149,009 in 2001. To achieve the slight increase in compensation, primary care physicians had to work much harder. Productivity leapt 11 percent.

Process errors most common in primary care

While much of the recent focus on medical errors has been on hospitals, a study published in the September 2002 Quality and Safety in Health Care examines errors in primary care physicians’ offices, where more than 12 times as many patients are seen. Sponsored by The Robert Graham Center, the AAFP’s policy center in Washington, D.C., the study found that the types of errors made in primary care settings are different but no less significant than the types of errors made in hospitals. Its authors categorized medical errors in primary care settings as either “process errors” (e.g., administrative mistakes, failures in the lab or diagnostic imaging process, and miscommunication) or “knowledge and skills errors” (e.g., errors arising during the execution of clinical tasks, misdiagnoses and wrong treatment decisions). Eighty-six percent of primary care errors reported in the study were process errors; 14 percent were knowledge and skills errors.

“The data highlight the important role of administrative systems, particularly medical record systems, as a source of errors that matter to patients and doctors,” wrote the authors. “A single death was the most serious consequence reported in this study and was traced to a failure of message handling.”

PRACTICE PEARLS from here and there

Incompetent employees

It may happen on occasion that you discover one of your employees to be incompetent in crucial areas. Instead of giving him or her the immediate boot, try to help your employee rise from mediocrity.

Provide feedback. Meet privately with the employee, and focus your feedback on objective performance measures, not personality.

Provide examples. Show the employee examples of work that meets your expectations, and set performance benchmarks.

Provide training. Send the worker to training courses, and establish a review period of, say, 45 days in which you expect to see improvement.

– Penttila C. When ignorance isn’t bliss.

Entrepreneur magazine. July 2001.

PRACTICE PEARLS from here and there

The trouble with data

Understanding and learning from your data is not always as easy as it seems. An increase or a drop in your numbers might not mean what you think. Here are some tips to remember:

• Variation is normal, whether you’re measuring the daily temperature or patient outcomes.

• Variation can be viewed in two ways: as an indication that something significant has occurred, or as a random event.

• Data must be plotted over time to be useful. Individual data points are not as meaningful as the overall trend.

– Understand variation in data. Continuous Improvement newsletter.

Boston: Institute for Healthcare Improvement; June 2002.

HIPAA extension a popular choice

A recent survey of almost 700 health care organizations found that only 7 percent would be ready to comply with the Health Insurance Portability and Accountability Act (HIPAA) transactions and code set standards by the original Oct. 16, 2002, deadline. Eighty-four percent reported they have applied or plan to apply for the one-year extension. Changes to the law’s regulations and questions about their interpretation were ranked as the biggest roadblocks to compliance, according to the survey’s coordinators, Phoenix Health Systems and the Health Information and Management Systems Society.

Some recommended doses are too high

Twenty-one percent of prescription drugs approved between 1980 and 1999 required manufacturers’ corrections to their prescribing information. The majority of corrections were to lower the recommended dose or to warn that the drug could be hazardous to certain patients, reports the Sept. 17 New York Times. Drugs approved through the FDA’s fast-track system were no more likely than other drugs to require correction.

Feds increase antitrust scrutiny

Nearly one month after the Federal Trade Commission (FTC) said it was planning to step up its scrutiny of merging hospitals and physician groups, the AMA is asking the FTC to shift its efforts toward insurers. Mergers in the insurance industry have reduced the number of competitors in the marketplace and given the resulting organizations unfair leverage, according to the AMA. The FTC has never brought an enforcement action against an insurer, the AMA says, which is “puzzling, because there are plenty of reasons to be concerned about the competitiveness of payer markets.”

Quality concerns

American health care has room for improvement, according to the results of a phone survey sponsored by the Commonwealth Fund. Twenty-two percent of all respondents reported they or a family member had experienced a medical error. Nineteen percent said they had problems communicating with their physicians. And 24 percent admitted they hadn’t followed their doctor’s advice.

Keep the change

Pharmacy benefit managers (PBMs) have been so successful at negotiating discounts with pharmacies that some patients’ co-payments for prescription drugs are actually higher than what the PBM must pay to the pharmacy, reports the Sept. 12 Wall Street Journal. Under law, pharmacies are only required to charge whatever is lower: the retail cost of the drug or the co-payment. So who gets the difference? Not the consumer. PBMs either pocket it or allow the pharmacy to keep it.

Insurer settles class-action suit with docs

Cigna has agreed to settle a class-action lawsuit that claimed the insurer misled physicians regarding how they would be paid and changed its terms and conditions arbitrarily without notifying the physicians. The terms of the settlement have not been decided. Blue Cross and Blue Shield of Illinois and Healthlink were also named in the suit but have not yet responded, reports the Aug. 23 Chicago Tribune.

Health illiteracy

More than 40 million Americans are estimated to have “limited literacy,” which may cause them to give inaccurate or incomplete health histories, take medications incorrectly and miss their doctors’ appointments, according to a literature review published in the May 2002 Family Medicine. The authors found that poor health literacy can be linked to less-optimal health outcomes and increased hospitalization rates, and is especially common among elderly patients.

A call for radical reform

The majority of patients, physicians, employers, hospitals and health plans support fundamental changes to the health care system, according to a 2002 Harris Interactive survey. The survey, taken annually since 1982, asks whether minor changes, fundamental changes or a complete rebuilding of the health care system is needed and then computes a single “radical change score” for each group. After many years of differing views between the groups surveyed, the gap narrowed this year. One reason, according to the researchers, is that doctors and health plan managers, who used to support the health care system, have now become almost as critical as the general public.