1. June 4, 2004JLN, MD Associates, LLC slide 1 Facility and Health Insurance Perspectives Joel L. Nitzkin, MD, MPH, DPA IEEE-USA Geriatric Technology Symposium Falls Church, VA June 4, 2004

2. JLN, MD Associates, LLC slide 2 Outline of Todays Presentation Introduction Perspectives –administrators, healthcare staff, etc. Issues –costs, benefits, etc.. Conclusions –suggestions to accelerate and expand technological innovation in healthcare for seniors

3. June 4, 2004JLN, MD Associates, LLC slide 3 Introduction Health administrators decide Health insurers pay Multiple internal constituencies Negative bias toward technological innovation well founded

4. June 4, 2004JLN, MD Associates, LLC slide 4 Perspectives Regulators (primarily state government) Accreditation/QA Certification –NCQA/HEDIS (National Committee for Quality Assurance/Health Employer Data Set) –JCAH ( Joint Commission on Accreditation of Healthcare Organizations) –URAC ( Utilization Review Accreditation Commission--American Accreditation HealthCare Commission) –(other) Insurance Carriers –CMS: Medicare/Medicaid and Other Facility –board of directors (or legislature) –administration –finance –marketing –physicians –nurses and other health professional staff –(all claim to represent patients/community)

5. June 4, 2004JLN, MD Associates, LLC slide 5 Perspectives Each constituency has its own perceptions, values and priorities Any one constituency can veto a proposal All involved must collaborate if innovation is to succeed What is favored by one constituency is likely to be opposed by others

6. June 4, 2004JLN, MD Associates, LLC slide 6 Issues Priority/Urgency Costs Benefits Odds for Success Barriers to adoption and success

7. June 4, 2004JLN, MD Associates, LLC slide 7 Priority/Urgency Required by regulatory agency or payer Needed for quality assurance credential Reduce cost Improve clinical outcomes Impact on community image of hospital or clinic

8. June 4, 2004JLN, MD Associates, LLC slide 8 Costs Fixed vs. variable costs –capital improvement –administrative overhead –direct/indirect Who pays – and for what –insurance carrier (capitation vs. fee for service) –facility –other Determinants of cost Non-dollar costs

9. June 4, 2004JLN, MD Associates, LLC slide 9 # 1 Determinant of cost Patient need/patient selection (home monitoring) –number of patients determine cost per patient –based on combination of medical and behavioral factors some will do well with instruction, but no expensive devices some will not be able to effectively use monitoring equipment only those in the middle-range of behavioral capabilities will benefit from the marginal expense of the expensive devices Neither the medical records nor the medical staff can objectively sort their patients into these three groups

10. June 4, 2004JLN, MD Associates, LLC slide 10 Other Determinants of cost Program staffing –FTE required –staff training –oversight/supervision Data systems needed to track utilization, costs and benefits Build vs. Buy Adverse consequences –costs –patient outcomes –liability issues

11. June 4, 2004JLN, MD Associates, LLC slide 11 Non-dollar costs Control/discretion Patient satisfaction Physician satisfaction Community image of healthcare system

12. June 4, 2004JLN, MD Associates, LLC slide 12 # 1 Determinant of Benefit Estimate of what would have occurred without the new technological innovation Outcomes, cost, medical errors, etc. Easiest at time of initiation of program All but impossible after the program has been in place for more than a year Enrollment, physician behavior, patient behavior and healthcare policy constantly changing -- all of these also impact outcomes

13. June 4, 2004JLN, MD Associates, LLC slide 13 Benefits Patient outcomes Impact on healthcare costs Non-dollar benefits –control/discretion –patient satisfaction –physician satisfaction –community image of healthcare system

14. June 4, 2004JLN, MD Associates, LLC slide 14 Odds for Success Simple replacement –(teleradiology for conventional radiology) Add-on –(home monitoring systems) Change the way business is done –electronic medical records –telemedicine Risks of veto and failure increase exponentially with the number of constituencies that must adopt the new innovation

15. June 4, 2004JLN, MD Associates, LLC slide 15 Barriers to Adoption and Success Quality and objectivity of empirical evidence Squishiness of projections –what would have happened without the intervention Perceptions –not my/our job –control/discretion –patient satisfaction –physician satisfaction –community image of healthcare system People Dollars

16. June 4, 2004JLN, MD Associates, LLC slide 16 Conclusions and Suggestions Advocates need to understand perspectives and issues Vendors and manufacturers need to address –evidence –perspectives –issues –odds for success –barriers Use of DM firms, consultants and other intermediaries Major role to be played by national organizations

17. June 4, 2004JLN, MD Associates, LLC slide 17 Major Role to be Played by National Organizations Advocate for legislation, regulation and quality assurance guidelines Educate their internal constituencies as to the issues noted in this presentation Assist manufacturers and vendors –identify markets within the world of healthcare delivery –assist in design of products that will better meet the needs of healthcare constituencies Provide a venue for (relatively) objective research –to demonstrate the value of each type of innovation and –to clarify the conditions required for successful implementation.

18. June 4, 2004JLN, MD Associates, LLC slide 18 Contact Information Joel L. Nitzkin, MD, MPH, DPA JLN, MD Associates, LLC 4939 Chestnut Street New Orleans, LA 70115-2941 phone: 504 899 7893 or 800 598 2561 cell phone: 504 606 7043; fax: 504 899 7557 jln@jln-md.com www.jln-md.com