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The Healthcare Reform Bill Results in Opportunity for Connected Health

April 5, 2010

The Patient Protection and Affordable Care Act, commonly known as “Obamacare” was an amazing triumph, whatever your political persuasion.  Most folks have absorbed the idea that this legislation will require that most citizens of the U.S. carry health insurance.  What is hidden in the crevices of this voluminous piece of legislation are a significant number of tools congress and CMS can use to move us to a new payment model.  If we can’t get that done, we will not see any let up in the relentless increase in costs that is already paralyzing the nation.

Our experience suggests that connected health is an ideal strategy to achieve the goals of population health management, the patient-centered medical home, higher quality at lower costs and preventative care.   We’ve seen our connected cardiac care program result in a reduction of admissions of about 50%, our diabetes connect program result in a decrease in HbA1c of about 2 points and our Smartbeat hypertension program result in significantly lower blood pressure.

With those results in mind, I surveyed the legislation and came up with the following provisions where connected health will be an important part of achieving success:

Sec. 2717 – Ensuring the quality of care —  Reporting by health  plans

Provides  that the Secretary  shall  develop  requirements  for  health  plans  with respect to benefits  and reimbursement  structures  that,  improve  health  outcomes through  the implementation  of   activities  such  as  quality  reporting, effective case management, care  coordination,  chronic   disease management,  and medication and  care  compliance initiatives.

Sec. 2703 – State option to provide health homes to Medicaid enrollees with chronic condition.

Provides states the option of enrolling Medicaid beneficiaries with chronic conditions  into a health  home.

Sec. 2704 – Demonstration project to evaluate integrated care around hospitalization

Establishes a demonstration  project,  in  up  to  eight  States,  to study the  use  of bundled payments  for  hospital  and  physicians  services  under Medicaid.

Sec. 3022 – Medicare  shared  savings  program – Accountable Care Organizations

Rewards  Accountable  Care  Organizations  (ACOs)  that  take  responsibility  for the costs  and   quality  of  care  received  by  their  patient  panel  over  time.  ACOs can include  groups  of  health  care   providers  (including  physician  groups, hospitals, nurse  practitioners  and  physician  assistants,   and  others).  ACOs  that meet quality-of‐care  targets  and  reduce  the  costs  of  their  patients   relative  to  a spending benchmark  are  rewarded  with  a  share  of  the  savings  they  achieve for the Medicare  program.

Sec. 3023 – National pilot program on payment bundling

Direct  the  Secretary to develop  a  5‐year  national,  voluntary  pilot  program encouraging   hospitals, doctors, and  post‐acute  care  providers  to  improve  patient care and  achieve savings   for  the Medicare  program  through  bundled  payment models. The Secretary is also  required to   submit  a  plan  to  Congress  to  expand the  pilot program  if  doing  so  will improve  patient  care  and   reduce  spending.

Sec. 3024 – Independence at home demonstration program

Creates  a  new demonstration  program  for  chronically  ill  Medicare  beneficiaries to test  a   payment incentive  and  service  delivery  system  that  utilizes  physician and nurse  practitioner   directed  home-based  primary  care  teams  aimed  at reducing expenditures  and improving  health   outcomes.

Sec. 3025 – Hospital readmissions reduction program

This  provision  would adjust  payments  for  hospitals  paid  under  the  inpatient prospective   payment system based  on  the  dollar  value  of  each  hospitals percentage of  potentially   preventable Medicare  readmissions  for  the  three conditions  with  risk adjusted readmission   measures  that  are  currently  endorsed by  the  National  Quality Forum.  Also, provides the Secretary authority  to  expand the  policy  to  additional conditions  in  future  years  and directs  the   Secretary  to calculate  and  make publicly available  information  on  all  patient  hospital   readmission  rates  for certain conditions.

Sec. 4108 – Incentives for prevention of chronic disease in  Medicaid

The Secretary  would  award  grants  to  States  to  provide  incentives  for  Medicaid beneficiaries  to   participate  in  programs  providing  incentives  for  healthy lifestyles. These programs must  be   comprehensive  and  uniquely  suited  to address  the  needs of Medicaid  eligible  beneficiaries  and   must  have demonstrated  success  in  helping individuals  lower  or  control  cholesterol and/or   blood  pressure,  lose  weight,  quit smoking  and/or  manage  or  prevent diabetes, and  may  address   co-morbidities, such as depression,  associated with  these conditions.

Sec. 4306 – Funding for Childhood Obesity Demonstration Project

Appropriates $25 million for  a  4‐year  demonstration  project  on  childhood obesity.

Those of us in the industry who have complained for years that our lack of progress was related to reimbursement issues had better take notice.  The requirement will be for us to sell our services to providers. They will need to accept our programs as part of their expense base in order to achieve improved quality and outcomes and the financial rewards that come with them.  This is no mean feat. The healthcare industry is built on the premise that one buys technologies because they will drive revenue. Rarely does a company make the case that a given technology is valuable because it creates efficiencies. That is what we’ll need to do to take our place in the exciting history that will be the redefinition of healthcare payment in the U.S.

2 Comments leave one →
  1. April 7, 2010 11:04 am

    Hello Joe – an insightful post and thank you for pulling out the specific elements of the reform that encourage payment reform and innovative delivery models and therefore the use of connected health solutions. I too see a slow trend towards increased compensation for use of tools that promote patient engagement and care coordination. However, my understanding of industry history is that we have seen fits and starts down this road in the past. Now in the past that technology has never been so ubiquitous and user friendly so perhaps this time things will be different. And I think if we link in the stimulus plan’s push to increase general use of technology in health care we may see a tipping point.

    My concern is that there does not seem to be any specific language directly reimbursing for the use of this kind of technology. In fact, I understand there is a strong movement that will probably succeed to water-down even the concept of “meaningful use.” I think it is critical we (1) continue to pressure to include connected health programs as a part of care and (2) demonstrate through research, including on both health outcomes and costs, the benefits of our approaches. Here at DPS Health, we are working hard to ensure this strong initial momentum is translated into evidenced based approaches that show continued delivery on the promise of connected health.

    Joe – do you see additional ways to continue to push for greater adoption and reimbursement for connected health programs? I remember from business school a famous graph of a technology climbing the s-curve only to not actually hit the point of inflection but die out. The value of the solutions we are all working on is too high to let that happen.

    I hope the stimulus and health care reform’s movement towards payment reform and increased use of technology to in fact harbor a dramatic change in the structure of the industry towards increased longitudinal care, a focus on outcomes, and increased use of the connected health tools that support those objectives.

    Thanks for providing a space for this important dialogue.



  1. Connected Health and IT– Improving Adoption and Innovation in TeleMedicine and e-Health - Best Connected

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