Archive for February 7th, 2011

PPO Discounts – Kind of Confusing Gertrude!

Monday, February 7th, 2011


A large South Texas school district is in a quandry. Confusion reigns. The courts are involved. Everyone has an opinion, and none are compatible.

PPO “A” had the case first. An independent out-of-state auditing firm was hired (Audit Firm #1) to audit claims and determined that the overall provider PPO discount was 41%.

PPO “B” subsequently gained the account. Another out-of-state independent auditing firm (Audit Firm #2) was retained to audit the claims and determined that the overall provider PPO discount was 37%, a “loss” to the district.

PPO “A” regained the account. After the first year a report was generated by the TPA showing that the overall provider PPO discount was almost 59%. This represents a gain in discounts from when PPO “A” first had the account of +18%.

Local newspapers printed the story. Readers were mislead. In actuality, this district’s claims over a three year period went up over 56% despite increasing “discounts.”

In a three year period, PPO “A” increased their PPO discounts from 41% to almost 59%, a gain of 18%. Yet the district’s health costs increased.

Did PPO providers agree to reduce their fees by 18%?  If so, then they gave up almost $13,000,000 in annual fees for this school district. (Audit company #2 estimated that for each 1% PPO discount = $700,000 in savings).

In reviewing information gained from the Texas Open Records Act, a contending PPO guaranteed a minimum of an overall PPO discount of 62% and even put their administration fees at risk should the benchmark of 62% not be reached.  They even included out-of-network claims in their guarantee offer. Yet, this carrier was not successful in gaining the account. Using the formula provided by Audit Company #2, this contract would have saved the district over $ 17,000,000 over PPO “B”‘s contract less than two years before.

So here is a summary: PPO “A” had the account first, and saved the district on average 41% in claims. PPO “B” gained the account and saved the district an average of 37% in claims. PPO “A” regains the account and now has an overall PPO discount of almost 59%, up from 41%, for a gain in savings to the district of +18%. Yet a contending PPO network guaranteed their discounts to be 62% or better, and did not gain the business although it was supposed that the savings to the district would exceed $17,000,000.

Kind of confusing, isn’t it?

Editor’s Note: Fuzzy math reigns supreme in South Texas these days. Forget the discounts – they mean nothing.

Electronic Health Records – A Health Care Professional’s View

Monday, February 7th, 2011

             Allscripts CEO Glen Tullman: An argument for Wikileaks in US healthcare

In 2008, Allscripts CEO Glen Tullman told Alex Nussbaurm of that physicians should take out loans to invest in his EHR product “to ensure that doctors have some skin in the game.” What did you expect? How much charm does it take to sell federally subsidized products when everyone knows that they’re mandated anyway?

Yesterday, Nicole Lewis posted “Health IT’s Future Without David Blumenthal” – a glowing and arguably deserved tribute to Dr. David Blumenthal who is leaving the ONC;jsessionid=0OLOEMENGCENJQE1GHRSKH4ATMY32JVN?articleID=229201216&pgno=1&queryText=&isPrev=

From where I’m sitting, it’s clear that Tullman used Lewis and InformationWeek to score more points with Washington and Wall Street, while continuing to marginalize the interests of those who actually take out loans to purchase his product: “David shepherded ONC through a very critical time . . . the creation, definition, and implementation of meaningful use, which really is a way to ensure that physicians actually use electronic records to improve care, but also that taxpayers get good value for their investment.” What about the doctor’s investment and more importantly, if a doctor is busy clicking on links to qualify for meaningful use dollars, who is accountable to the patients?

I don’t know about you, but it’s not difficult for me to recognize that like other HIT stakeholders whose careers are propped up by easy mandates rather than finicky satisfied customers, Tullman indeed has solid free-market reasons to play to investors and politicians while fearing his customers. They’re pissed at the man.

HCPlexus recently partnered with Thompson Reuters to conduct a nationwide survey of almost 3,000 physicians concerning their opinions of the quality of health care in the near future considering the Patient Protection and Affordable Care Act (PPACA), Electronic Medical Records, and their effects on physicians and their patients. (See “5-page Executive Summary”)—2011-Thomson-Reuters-HCPlexus-National-P

“Sixty-five percent of respondents believe that the quality of health care in the country will deteriorate in the near term. Many cited political reasons, anger directed at insurance companies, and critiques of the reform act – some articulating the strong feelings they have regarding the negative effects they expect from the PPACA.”

At this crucial time when Republicans are already threatening to cut off remaining HITECH funding, whose job will it be to break the news to HHS Secretary Kathleen Sebelius that the EHR savings she was counting on to fund a major portion of healthcare reform are only as valuable as CEO Tullman’s politically-correct fantasy? Pop! From what Nicole Lewis writes, my bet is that the Secretary won’t take the news well: “[Sebelius] reiterated that the successful adoption and use of HIT is fundamental to virtually every other important goal in the reform of the nation’s health care system.” Such pressure from the top down will make it even more difficult for HIT stakeholders, including insurers and politicians, to disown the most egregious. crowd-pleasin’, bi-partisan blunder in medical history since blood-letting was declared Best Practice by popular demand.

According to the HCPlexus-Reuters survey results, one in four physicians think EHRs will actually cause more harm than help in spite of Dr. Blumenthal’s best efforts. I wonder if the escalating bad press about EHRs helped Blumenthal decide to return to his academic position at Harvard. Of course, the controversy over HITECH is nothing new. There have been signs for years that EHRs, including Allscripts products, will neither improve care nor provide taxpayers (our grandchildren) a good value for their investment.

If Tullman was unaware of the highly critical HCPlexus-Reuters study when he assured InformationWeek that his subsidized product has value in the marketplace, he must have been aware of the disappointing news concerning two other recent studies performed by Public Library of Sciences (PLoS) and Stanford which also confirm that EHRs do not improve care. So imagine what it’s like to be one of Tullman’s new, naïve and trusting customers who are expected to use the product for something it’s not designed to do.

It’s my opinion that Tullman’s apparently incorrigible business ethics have no place in the land of the free, and that more transparency in healthcare would help protect the nation from such politically-connected tyrants. Tullman, a long-time Chicago friend of Barack Obama and a Wall Street sweetheart, would still be just another domesticated CEO if it weren’t for the bi-partisan mandate for electronic health records that help Allscripts, Obama and Wall Street more than clueless patients.

If you want to seriously cut costs in US healthcare as well as cut our grandchildren’s taxes, demand transparency from not just the doctors and patients, but from stakeholders as well. Protected communications between good ol’ boys in healthcare are hardly diplomatic cables about military secrets and ALWAYS increase the cost of healthcare.

So when do you want to get the website started? I’m here to serve wherever you need me.

D. Kellus Pruitt –