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U.S. needs to raise investment, shift medical research priorities

U.S. needs to raise investment, shift medical research priorities | Healthcare and Technology news |

The U.S. is losing its lead in global medical research, and many of the projects that do get funded overlook common diseases that afflict millions of people, according to a new analysis.

Experts point to falling public and private spending on the kind of basic research that leads to new discoveries, and a lack of innovation in delivering healthcare, in a paper in the Journal of the American Medical Association that’s part of a series on the future of medicine,

"With respect to U.S. public financing there has not been the political will to make biomedical research a priority in the same way that it was in the 1970s with the war on cancer or in the 1980s with the war on AIDS," said lead study author Dr. Hamilton Moses, of the Alerion Institute and Alerion Advisors LLC in North Garden, Virginia.

At the same time, private U.S. companies have concentrated investment in advanced clinical trials rather than on the basic research that’s needed to tackle some of the chronic conditions like diabetes that afflict the greatest number of people, Moses told Reuters Health in an interview.

Overall U.S. investment in biomedical and health services research grew just 0.8 percent a year from 2004 to 2012, down from a 6-percent annual growth rate between 1994 and 2004, Moses and his colleagues found.

Government funding in the U.S. fell to 49 percent of the world's public research investment by 2011, down from 57 percent in 2004.

U.S. industry, which accounted for nearly half of corporate investment worldwide in 2004, slipped to 41 percent of private funding in 2011.

Asia, aided largely by China, tripled investment to $9.7 billion in 2012 from $2.6 billion in 2004.

In the U.S., public funding concentrated on cancer and rare diseases, with less than half of government investment targeting 27 common diseases – including chronic obstructive lung disease, injuries, stroke, dementia and pneumonia - that account for 84 percent of deaths in the U.S. and significant disability.

Cancer alone accounted for 16 percent of total funding from the National Institutes of Health and was the target of one in four medicines in clinical trials, the study found.

"With cardiovascular disease, the number one killer, some of the large pharmaceutical companies have really pulled back in this area," said Dr. Kenneth Kaitin, director of the Tufts Center for the Study of Drug Development in Boston, Massachusetts.

"The industry has changed over the last few years and there has been tremendous pressure to reduce research and development costs that has resulted in a tremendous shift away from high-volume, low-cost medicines toward seeking a billion- dollar drug that treats a very, very small population," said Kaitin, who wasn't involved in the study.

Health services research, which looks at issues around access to care as well as quality and costs, has accounted for less than 0.33 percent of national health expenditures between 2003 and 2011, the study found.

Private insurers ranked last (0.04 percent of revenue) and health systems 19th (0.1 percent of revenue) among 22 industries in their investment in innovation in this area, the authors note.

"This is concerning in terms of trying to tackle improved quality of care and improved access to care, and in terms of bending the cost curve," said Glen Giovannetti, a global life sciences expert at Ernst & Young in Boston.

"There's lots and lots of research done on drug development and much less done on whether one course of treatment is better than another," said Giovannetti, who wasn't involved in the study.

With respect to both biotech and health services research, there is an acute need to increase research investment and to create more reliable funding mechanisms, said Dr. Victor Dzau, president of the Institute of Medicine, a division of the U.S. National Academies of Science.

Dzau, who co-wrote an editorial accompanying the study in JAMA, said the danger of disparate, unreliable funding streams is that it forces scientists to work in fits and starts, often abandoning promising basic research.

"If you think about all of the major advances in health care services, biomedical research, and diagnostics, there is no question that it's based on innovation and relied at the start on basic research," Dzau told Reuters Health.

"When we decided to put a man on the moon that was an aspirational goal, and we as a nation should be able to recognize that this is now an important moment in medical research," Dzau said. "We aren't saying give money for money's sake. We are saying set priorities, and give researchers at least five years of stable funding to pursue specific goals."

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Hospitals want Congress to keep ICD-10 on track

Hospitals want Congress to keep ICD-10 on track | Healthcare and Technology news |

Any attempts to delay, again, ICD-10 compliance would be a waste of time and money, and should be opposed, eight healthcare organizations--including the American Hospital Association and the Premier healthcare alliance--stressed to members of Congress in a recent letter.

ICD-9 is "outdated" the organizations said, and ICD-10 would enable providers to keep up with medical advances.

"The [most recent] delay added billions of dollars in extra costs," the organizations said. "Many of our members had to quickly reconfigure systems and processes that were prepared to use ICD-10 back to ICD-9. Newly trained coders who graduated from ICD-10 focused programs were unprepared for use of the older code set and needed to be retrained back to using ICD-9. ... This results in a doubling of costs that are not productive."

An ICD-10 delay was not included in the proposed "Consolidated and Further Continuing Appropriations Act, 2015" to fund the government, which is also being referred to as the "cromnibus" bill. The proposal is expected to be voted on by Congress later today.

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How hospitals are tackling costs in 2015

How hospitals are tackling costs in 2015 | Healthcare and Technology news |

It's no secret that Americans pay a pretty penny for their healthcare – the highest in the developed world, in fact. What's more, by many reports, they're not even getting the quality outcomes to match that hefty price tag.

As providers face pressure to reduce costs on the front end – for their patients – they're also feeling the pinch on the back end: their bottom lines. For hospitals and health systems, especially, 2015 is a landmark year for everything related to costs.

In 2013, national health expenditures approached $3 trillion, representing $9,255 per person and accounting for a whopping 17.44 percent of the gross domestic product. In the wake of the Affordable Care Act, the industry now more than ever is facing pressure to be accountable and value based. That's often a struggle for many.

So as the industry works to comply with myriad regulatory changes that have been implemented, what’s top of mind this year for the healthcare finance folks?
For Karen Mihalik, executive director of revenue cycle managementat the Cleveland Clinic, there are several things that come to mind.
For one? This year, risk-based contracting is going to be tough, said Mihalik, who works with an RCM team comprising 1,700 FTEs. Also, ACOs and handling bundled paymentswill pose big challenges.
"This year is different in that we really need to make sure that we align again with the clinical component, and that we're building the right business model and administrative model to manage that risk-based population," she said.
One risk-based model, the Medicare ACO, has been a serious challenge for many provider groups. The federal government's Pioneer ACOprogram, for instance, which originally started with 32 participants has whittled down to 19 organizations as of September 2014. 
For the folks at the Denver-based Physician Health Partners, one of the groups that dropped out of the Pioneer model back in 2013, the benchmark setting process within the Pioneer model needed some serious re-working.
We can't take that much risk when the game keeps changing a little bit," Kenneth Nielsen, president and CEO of Physician Health Partners, told Healthcare IT News back in 2013, especially when these adjustments aren’t geographically based. "The Denver market, where our benchmark was $8,000 per beneficiary, per year is a lot different than an East Coast market where their benchmark was twice that."
For PHP, it wasn't all bad news, however. It was able to decrease its readmissions and hospitalizations rates and met all the quality metrics. But, financially, it wasn’t viable. It reported shared losses for fiscal year one, which was anticipated, Nielsen said, but another two years before reaping the supposed financial benefits? It proved just too risky. "We just weren't able to take enough time to take the risk over three years at this point," Nielsen added. Right now, he said, "We're between bleeding edge and cutting edge."
Cleveland Clinic passed on the Medicare ACOs in the first round, with its CEO Toby Cosgrove saying the organization was "disappointed" with the Centers for Medicare and MedicaidServices ACO proposal, claiming they requirements weren’t outcomes based and had other reporting requirements that were burdensome to healthcare organizations. 
Another item on the to-do list this year, aside from risk-based contracts? Payers have some work to do with the insurance verification process.
Specifically, Cleveland Clinicneeds to be able to identify patients enrolled in an ACA-related plan and gather crucial information related to their coverage, said Mihalik. Having the ability to know who these specific patients are and how they are doing in digesting this "new world" is essential, she added. 
For year two, Cleveland Clinic is really focused on making sure payers are able to specifically identify those patients as being in an ACA-related plan and subsequently providing that data to the clinic as part of the registration verification process. 
"We want to be able to take a look at that population, and we really can't effectively do that right now because the payers haven't built the right models," said Mihalik, "so the system changes really aren't needed on our side; they're needed on the payer side."
Mihalik isn't alone. In fact, 62 percent of MGMAmembers said they had moderate or extreme difficulty with identifying patients with ACA coverage, according to a 2014 MGMA survey. "We are going to have to hire additional staff just to manage the insurance verification process," one MGMA practice manager reported in the survey. 
As far as the IT goes, the payers are the ones with the work to do, Mihalik added. 

ICD-10 confusion not helping

Hospitals and health systems are businesses. Sure, their purpose is to provide patients with quality care at lower costs, but at the end of the day if they're not financially viable and their bottom lines are consistently in the red, there's a big problem.
For Arnette Marbella, director of HIM and CDM revenue cycle at Tufts Medical Center, it's the ICD-10limbo that's concerning from a financial perspective. There's talk that ICD-10 will be delayed yet again, pushing its go-live data of October 2015, even further down the road. The revenue implications in that is that most hospitals have already started at least a year or a year and a half ago on preparing for the transition," said Marbella. 
This preparation, of course, means systems are tested, making sure that the systems are upgraded to be able to accept the news codes, physicians are trained on documenting. That part – clinical documentation is integral, she added. If you think about it, she said, the industry is going from some 14,000 diagnosis codes to nearly 70,000 codes, so "there's no one-to-one match for the codes."
Ultimately, clinical documentation translates to "we have to be more specific on the codes that we assign, and that in turn translates to the reimbursement that we get or the bill that we submit to the payers and they reimburse and then we get," she said. A loss of revenue due to coding errors or administrative/procedural issues is a "concern in every hospital," Marbella added. 
Mihalik has her own concerns about ICD-10. 
It impacts really nearly every system," she said. "Most of our systems work off of diagnosis data, so the work we're doing around remediation and cross walks and testing is significant but very, very necessary," she added. The other area we're really focused on has to do with our coding and clinical documentation so that we are prepared now as we can be prior to go-live in making sure that we have quality training and audits going on to help make sure that we're there to the level that we need to be."
Investments in technology that they’re leveraging with computer assisted coding is also key, she said. 
With all of these items on providers to-do lists, it's difficult to focus on much else. But there is more, said Mihalik. Patients and their engagement are absolutely key. Our focus is really on what's still to come," she said, "because there are significant changes still in front of us related to primarily patient engagement so our world is really focused on first and foremost patients and being able to provide them timely and integrated information."

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