Insight, analysis & opinion from Joe Paduda
The adage goes something like – when the US sneezes, the world catches a cold, signifying just how much influence this country has on the rest of the world.
That’s analogous to Medicare’s impact on the health care sector. And Medicare is about to change the way it pays hospitals, a change that will have a dramatic effect on every private payer from HMO to individual carrier to workers comp insurer to self-insured employer.
If you want to know why you are getting more physician bills with meds on them, it’s simple – physician dispensing generates big profits.
Texas just released workers comp medical payment data for 2005 and 2006. There’s some really great stuff here.
The manufacturer of oxycontin agreed to pay $20 million in penalties for encouraging docs to prescribe the drug more often than approved by the FDA.
And that’s just for starters.
Richard Eskow of Sentinel Effect reports on the latest revelations about a bit of book-cooking at the VA. Seems the VA has been a bit, or perhaps more than a bit, overly positive about its record.
More troubling than boosterism is the allegation that the VA selectively reported results, and even fabricated conclusions to make the system appear better than it actually is.
As a fan of the VA, I’m concerned about two things.
I’m on a brief vacation mountain biking in Moab, Utah. A gorgeous place, great people, great riding. And upon return from a long and tiring but very fun ride this am, I open up the latest from Fierce Healthcare to read reports about not one, but two reimbursement scams and one piece on docs who don’t disclose when they make mistakes.
That just crushed the hard-earned buzz.
The folks over at Fierce Healthcare have posted their Hospital Innovation Awards. These aren’t the standard JCAHO-type plaques, but rather focus on creativity and novel solutions to common problems.
Big pharma woos docs with free food, trips, and samples. Now that’s a “dog bites man” story. The reason for the ongoing marketing to docs is obvious – more contact, more drugs sold.
But the world is starting to look much more closely at the pharma-physician relationship, and that examination is likely to bring changes.
Just to be clear, I’m talking about the ones used in spine surgery, bone and joint surgery, and other orthopedic procedures. The use of surgical implants has grown dramatically, as have their prices, and the impact of utilization and price means big bucks for WC payers.
Big bucks as in $72 million in California alone. As in adding 11% to 33% to inpatient hospital bills in the Golden State.
Jason Shafrin reports on the link between physician compensation mechanisms and surgery rates.
Here’s the “money quote” –
“When specialists are paid through a fee-for-system (FFS) methodology rather than a capitation or salaried basis, surgery rates increase 155%. There is suggestive evidence that surgery rates fall when primary care physicians are paid on a fee-for-service basis compared to capitation or salaried payments.”
Not addressed is the key question – is the rate of surgery appropriate under either compensation mechanism?