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Hawaii’s He@lthcare Revolution

Vast changes aim to control costs and improve care

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With their agreement in effect, HMSA and Queen’s are hammering out measures or metrics to evaluate patient results and determine new financial rewards based on quality. “It will take six to nine months to put into effect,” says Keene of Queen’s.

Keene pointed out the complexity of coming up with measurements. For instance, using patient readmission rates could be a problem, because unless you drill down, it’s unclear why a readmission occurred.

“You want to identify metrics that are clean, that are measurable and very well understood as to what’s driving them,” he says. “Sometimes you can pick a metric and you may look at a result, but it may not tell you the quality of care behind it. You may take a surgical outcome, and the number may vary up or down because of particular circumstances, but that doesn’t mean there’s been any decline or improvement to quality for that patient.…

“Queen’s already has a long history of focusing on high-quality outcomes for its patients,” Keene says. “There isn’t going to be much of a change at all in the way we practice. We already have a lot of metrics we use internally. It’s just a matter of agreeing with HMSA on what to track for the reimbursement model.”

HPH is working out similar agreements with HMSA. “You have to change the stream so instead of being paid for events, you’re paid for outcomes,” Sted says.

Keene says his understanding is that, eventually, HMSA will apply the same model with private physicians.

Kauai’s Scheppers believes the changes will translate into better care. “Instead of waiting for people to get sick and come into the doctor’s office, we’re trying to keep people well so they don’t come into the doctor’s office so often. We’re trying to get the system to take care of people before they get sick. It makes total sense.”


Buzzwords You Should Know

Here are three important concepts in the healthcare revolution:

Evidence-based medicine: Using the best available evidence gained from recent studies and the scientific method to make medical decisions, especially regarding the risks and benefits of certain treatments.

Bundle metrics: Well-established best practices applied to a particular disease, condition or illness. Studies have proven that, on average, patients stay healthier if these measures are followed.

The patient-centered medical home: Healthcare that is a partnership among the primary-care physician, patient and patient’s family to ensure decisions respect the patient’s needs and offer support so the individual can participate in his or her own care.


Big losses in Key Areas

As Hawaii’s fourth-largest industry, healthcare employs about 43,400 people and adds $4.1 billion annually to the Islands’ gross domestic product, according to the Healthcare Association of Hawaii. Yet Hawaii’s hospitals have been taking staggering financial hits over the past decade. According to the association:

• Local hospitals lost $697 million to bad debt and charity care from 2003 to 2008.

• In 2007 alone, Hawaii hospitals spent $185.2 million providing care to Medicare patients for whom they were not reimbursed by government.

• The similar deficit on Medicaid, QUEST and uninsured patients was $48.1 million in 2007.


Going Digital While Trying to Protect Privacy

Christine Sakuda, executive director of the Hawaii Health Information Exchange, hopes that within five years, 75 percent of the state’s 2,900 physicians will have electronic medical records in place.

“If you’re an independent physician and you do everything on your own, then the costs will be higher,” Sakuda says. “That’s why there are efforts around leveraging the costs (with group purchasing).”

Federal incentives to encourage doctors to install EMR systems include:

• $44,000 over five years for eligible Medicare providers;

• $64,000 over six years for eligible providers with 30 percent of their patients on Medicaid.

The nonprofit Health Information Exchange helps physicians pick vendors and install systems. It is also helping develop a state plan so all systems can eventually talk to each other while protecting patient privacy as required by federal law.

“It’s not Big Brother out there trying to get all your patient information and do something evil with it,” Sakuda says. “The value of health information exchange comes from trying to improve the way care is delivered.”


How Reimbursements Will Change

By 2013, HMSA says 15 percent of its reimbursements will be based on quality care, compared with 2 percent now. HMSA’s Hilton Raethel describes how the gradual switch from fee for service to paying for quality care will work:

For the next three years, fees for service will be frozen, she says. Money normally spent on fee increases will go into a fund that will be dispersed to providers and hospitals quarterly based on quality of care.

“Let’s say we normally increase our fees by 5 percent annually,” says Raethel. “We’re going to put that into a ‘bucket’ and the hospital and physician can earn that money depending on how well they do on these quality metrics.

“For example, Hawaii Pacific Health is getting approximately $300 million a year from HMSA. So let’s say there’s $20 million on the table every year (normally for fee increases) but that money goes into the quality bucket, and gets paid out every quarter depending on how well they do.”

• Raethel says HMSA will help providers succeed in the new reimbursement system. “We’re going to do everything we can to help them get these dollars because that means better care for patients.”

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