Issues & Legislative Committee Reports

December 13, 2007

TJC / GPO Oversight Committee

GPO Oversight:
GPO vendor relationships received yet more bad press this month when the Fitzgerald/Novation qui tam lawsuit reported on by the Fort Worth Weekly was picked up by the New York Times and expanded into a lengthy Sunday edition story about how our GPO's unfairly restrict competition in the marketplace.  The University Healthsystem Consortium subsequently released a statement reaffirming the innocence of their contracting arm, Novation, in any wrongdoing in their vendor relationships or contracting practices.   Though the case is already nine years old, UHC characterized it as "still in the early stages" and distorted by the Times historical crusade against health care GPO's.

Separately the AHA magazine Materials Management in Health Care praised GPO reforms in the lead story of their November issue, citing no more heavy handed dictation to members over what vendors to use, plus opening up access to small vendors. 

In related news Senators Grassley and Specter introduced the Transparency In Medical Device Pricing Act, calling for quarterly reporting to HMS of average pricing by all manufacturers of implantable medical devices that get paid for by Medicare, Medicaid or CHIP.  The claim is that these type suppliers force a veil of secrecy over their pricing, including holding hospitals to contractual confidentiality that effectively makes federal and state reimbursement higher than necessary.  The goal is a reporting system similar to the one HHS now uses for average drug sale price reporting and reimbursement rate setting.

Gainsharing Agreements

An investigative project was/is being conducted by Gene Schneller & Natalia Wilson from Arizona State University’s  W. P. Carey School of Business and submitted to Health Sector Supply Chain research Consortium. This started in March of 2007.

The title of this project is The Healthcare Supply Chain: What is it? And why is it important part of the ACGME Systems-based practice competency?

The issues addressed were related to educating physicians in the health care supply chain during graduate medical education.

The authors indicted that the benefits of addressing these issues would be to have the physicians engaged in the product choice decisions backed by supply chain knowledge.

In their executive summary, the authors noted that Physician preference items are technologically advanced, and financially stressing on hospitals and that optimal decision making requires physician leadership. They indicate that education on supply chain should be part of the ACGME competencies under systems-based practice.

This project was noted to be a “think piece” rather than a research project.

http://wpcarey.asu.edu/shmp/Consortium/upload/Report-Summary-on-GME.pdf

Consumer Driven Healthcare

1.  “Trends in Health Care Cost Spending
Source:  Kaiser Family Foundation, 9/2007
                              In 2007                             In 1970
Total Spend           $2.2 trillion                       $75 billion
Per US residents    $7,500                              $356
% of GDP               16.2%                              7.2%
50% of current spend is on Hospital, physician and clinical services
10% is for drugs
20% of total spend is by 1% of the population
55% is by private payors with 64% of that by insurance companies and 23% from out of pocket

2. “Health care Costs: a Primer”
Source:  Kaiser Family Foundation 8/2007, http://www.kff.org/insurance/upload/7670.pdf

3. “Clinton, Obama Continue to Spar Over Health Care Plans”
Source:  Kaiser Daily Health Policy Report 12/3/2007

Mayor issue between all the democratic contenders, who is required to obtain coverage, to what extent are they covered and who pays for those who are unable to afford coverage.

As had summaries of some op-eds evaluating the plans.  The op-eds were from Matthews at the Wall Street Journal and Will at the Washington Post.  Neither are pleased with these alternatives.

4. “Redefining Health Care: Medical Homes or Archipelagos to Navigate”, Enthoven, Crosson and Shortell
Source:  Health Affairs, 9-10/2007

This article is looking at the structure of healthcare delivery proposed by Porter/Teisberg in their book “Redefining Health Care: Creating Value Based Competition Based on Results”

Porter/Teisberg’s structure is one of integrated practice while Enthoven’s is based on integrated delivery systems. Both agree that the current system is based on shifting costs of care between payors and not on the value being delivered.

5. Web sites used researching this topic

-1. Galen.org
-2. Rand.org
-3. Cdhc.ncpa.org
-4. Cdhci.org
-5. Commonwealthfund.org
-6. Manhattan-institute.org
-7. Consumerunion.org
-8. Heartland.org
-9. Jama.ama-assn.org
-10. Kff.org
-11. Ncpa.org
-12. Aha.org
-13. Cms.hhs.gov
-14. Kaisernetwork.org
-15. nih.gov
-16. pnhp.org
-17. healthcareforall.org
-18. amsa.org
-19. uhcan.org
-20. healthinsurance.org
-21. healthmedicaltourism.org
-22. cocori.com
-23. treatmentabroad.net

Quality / Medication Errors / Safety Issues

Quality
The Centers for Medicare and Medicaid Services (CMS) issued a final rule with comment period updating the hospital Outpatient Prospective Payment System (OPPS) effective for services during the 2008 Calendar Year. This encourages higher quality and accessible healthcare through new payment policies and the reporting of quality measures.  CMS estimates hospitals will receive an overall average increase of 3.8% in Medicare payments for outpatient services in calendar year 2008 due to these changes.
Source:  www.cms.hhs.gov/HospitalOutpatientPPS

Medication Errors
A month after Medicare began not paying for eight preventable conditions, Minnesota hospital have agreed not to bill for 27 adverse health events, including leaving objects in patients during surgery, burns, falls, and serious medication errors. Approximately half of the hospitals in Massachusetts have also adopted similar policies. Hospital are now developing policies carefully because it can be difficult to determine if an infection, for example, was contracted while in the hospital or before admission.
Source:  www.hpnonline.com  November 2007

UPN Issues / Data Standards Issues
In October the Healthcare Supply Chain Standards Coalition (HSCSC) endorsed the following GS1 standards: the GLN, GTIN, and GDSN.

AHRMM has a non-voting observer role with the HSCSC Oversight Committee and is represented on all three of the HSCSC’s committees. AHRMM met with GS1 and representatives from CHeS in to discuss how to best market the standards and help supply chain professionals begin to adopt and use them in their facilities. AHRMM agreed to host a standards website which will function much like the conference website. The collective group also agreed to develop a provider toolkit to assist provider in getting started. AHRMM President Jean Sargent was asked and accepted an invitation from GS1 to be interim co-chair of the GS1 US healthcare group until there are official elections in February.  For the good of the industry, a group will meet in January to determine how to meld all the of standards efforts that are being undertaken by various organizations.