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Controlling Costs Through Payment Reform

While Colorado spends $30 billion in health care every year, costs continue to increase while value decreases. Yet, Colorado is better poised than many states to take on the challenge of improving health outcomes and stabilizing and/or decreasing costs due to its examples of structured, coordinated health care delivery systems...

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When Doctors Get a Union Card

Saturday’s New York Times carried a front-page story about negotiations between administrators and the physicians’ union at the New York Health and Hospital Authority over a new pay-for-performance arrangement. Physicians’ raises will be tied to their performance on indicators such as patients’ assessments of physicians’ communication with them, how quickly ED patients are transferred to beds and how quickly patients are discharged, as well as quality metrics such as 30-day readmission rates for certain diagnoses.

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Tipping Point in Health Care?

I’ve been in health care for over 30 years and as I think about most of the problems with healthcare… access, quality, cost, safety, etc., many of the solutions to these issues were obvious even back in those early days of my career. We knew then that fee for service reimbursement created perverse incentives and that outcome based payments aligned incentives for better care and lower costs. In general, care was siloed, inefficient and demanded vertical and horizontal coordination along with tools such as electronic health records (EHR). The problem was that there was no pressure to change unless it was self-generated. Today, many of the same problems exist, but the impetus and external pressures to improve are upon us.

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New Ways to Pay for Medical Care Can Lower Costs

People often wonder why health care costs so much. Surprisingly, the answer may lie not just in the price of medical care, but also in the way we pay for it.

Our current "system" rewards inefficient, high-cost medicine and penalizes efficient, low-cost health care. Because patients and insurance companies pay for each visit, procedure, prescription and lab test separately, there are built-in incentives for more care without regard to whether it is the right care or is making a difference in patients' health. As a result of the current health care payment structure, many experts believe that 20 to 30 percent of care provided does not add value – or even potentially harms the patient.

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Insurance Pools: How Do We Pay for the Expensive People?

Why you can’t fool all of the people all of the time.

I think for most people, including me at times, the effort to repeal and replace the Affordable Care Act is an exercise in taking something they didn’t understand well but have feelings about, and replacing it with something else they don’t understand well and will have feelings about.  I could comment on the state of our legislative process surrounding this case, but that’s for another day and another blog. 

Instead, if you can stand it, I’m going to use this column to try to explain the difficulty in reshaping the insurance pools in the ACA.

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Undoing American Healthcare

Why assuming we’re rational about health care may be a dangerous assumption

I am reading a wonderful book called The Undoing Project by Michael Lewis, about the development of behavioral economics by two of its pioneers, Daniel Kahneman and Amos Tversky.  One point of their work over five decades is that while we think we make decisions rationally and objectively, in actuality, our thinking and valuation of things are fluid, and uses different criteria with different weights at different times.

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Accessing the Power of Colorado's All Payer Claims Database

A recent Denver Post article highlighted findings from a Dartmouth Institute study that found significant variation in the percent of Medicare patients undergoing costly invasive treatments versus non-invasive lower cost procedures for similar diagnoses. Those that received costly surgical and invasive procedures for the same diagnosis didn’t necessarily have the best health outcomes. In many cases, the evidence suggests that patients can realize better outcomes from less intensive treatments including rest, physical therapy and other alternatives. This study provides a great example of the type of analysis that is possible using Colorado’s All Payer Claims Database (APCD) and highlights just a few of many possible examples.

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Why Focus on Palliative Care to Achieve Triple Aim? Part II in a Series of FAQs

Considering the fact that CIVHC ‘s expansive charge is to improve the quality of care and bend the cost curve for health care across the state of Colorado, many people wonder why CIVHC has committed to an effort so specific as improving access to high quality palliative care, especially at such an early stage in our organization’s development. Perhaps an organization such as CIVHC should be more focused on “big picture” issues in Colorado, by identifying where we have the greatest opportunities to impact the quality and cost of care for the largest segments of our population. In 2008, the members of CIVHC’s planning committee took on that exercise, and identified palliative care as one of those opportunities.

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Standing Up for Being Fiscally Responsible and Humane

In grad school, our cigar chomping chairman of the department would explode with a resounding Horse Sh#@t whenever somebody gave an answer that wasn’t well thought out, supported by facts or was just plain wrong. Get it wrong on all three counts and his cigar would fly across the room at about the same speed as his expletive. It got your attention.

As I held my breath waiting for the Supreme Court decision, and fearing the Accountable Care Act (ACA) would be overturned, I reflected on the times when I could have responded with my professor’s epithet when facts were being ignored or willfully misconstrued. It wouldn’t have changed a thing but would have felt good for the moment.

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Filling a Void – EMS Providers Step Up To Address Community Health Care Needs

Last month I had the pleasure of representing CIVHC at the International Roundtable for Community Paramedicine (IRCP) conference in Vancouver, Canada. My friends and family were a bit surprised (and somewhat jealous!) to learn I was travelling out of the country for a conference. I explained that CIVHC identifies and promotes innovative solutions to address Colorado’s health care crisis, and the IRCP is the only conference that focuses exclusively on the up and coming community paramedic model. Community paramedic programs, although relatively new to the US, have proven successful in improving health and saving costs, and CIVHC is identifying how this model might fill gaps across Colorado.

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Colorado All Payer Claims Database Launching in November

The Colorado APCD website goes live November 1st, 2012, and will allow us for the first time to start evaluating the big drivers affecting health care cost and utilization in our state. To celebrate this important milestone, CIVHC is hosting a launch event at The Colorado Trust from 10-11:30am. Please join us and other health care leaders in the state as we share some of the early data and findings in the APCD and demonstrate how to use the interactive website to search the health data of interest to you.

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Aligning Delivery and Payment Reform for Maximum Impact

As one looks at the efforts to transform health care delivery and payment in Colorado, two overwhelming impressions emerge. The first is the sheer quantity of innovation underway in our state. To see what I mean, look at CIVHC’s Inventory of Payment Reform and Delivery Redesign Strategies and the graphic that accompanies it . While we’ve done our best to be comprehensive, we know we’ve left important initiatives off these documents (and please contact us if yours is missing). But even our non-exhaustive list requires nearly two dozen pages to describe.

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Full Speed Ahead for Accountable Care

With the President’s re-election, the concepts embodied in the Affordable Care Act will pick up steam. One of those is the Accountable Care Organization (ACO) model. ACOs are voluntary organizations that focus on coordination for patients across care settings, including doctors’ offices, hospitals, and long-term care; the coordination is made “accountable” through payment models that reward quality and share (potentially) both up-side and down-side risk. While the ACA enabled ACOs specifically for Medicare, this vision of coordinated, accountable care is being used for all populations and a variety of payers. So this seems like an opportune time to share some information and observations about ACOs—both nationally and within our state.

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New Database will Provide Valuable Health Care Cost Info

Originally published in the Denver Business Journal, Nov. 9, 2012

by William N. Lindsay III, President of the Benefits Group-Denver for Lockton Companies

While the rate of increase in health insurance costs for Colorado employers has slowed, it continues to outpace inflation. If we want to slow this rate of growth still further, we need to understand what’s driving it. Finally, Colorado is getting a tool that will help us do just that.

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Obamacare: Hope, Fear and Misinformation

Recently I spoke about Obamacare to two different community groups. My expectations of each group were different given their locale – one was in well-to-do neighborhood that trends quite red at the voting booth (I was braced for anything up to and including a death panel discussion) and the other was in central Denver which I guessed would be more progressive in tenor. It turns out that the conversations were nearly identical and characterized by a striking polarity in which nearly everyone simultaneously viewed Obamacare with hope and fear.

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Clinical Integration Versus Market Consolidation: An Important Distinction

What do we mean when we use the term “integrated care”?

This question struck me as I read about a health plan’s recent purchase of a network of providers in another state. The plan CEO and the reporter both used the phrase “integration” to describe the company’s strategy. But the vision of integration that emerged was less about clinical care and more about business share—a vision that differs markedly from that of CIVHC and many other stakeholders. And it’s important to understand that distinction.

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Plaintalk Blog - What is a Bundled Payment?

What are bundled payments, and how do they help providers reduce waste and deliver better care? Take a look at our interpretation.

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Supreme Court Decision Aside, Colorado Needs to Continue Fast-Tracking Improvements for Our Health Care System

Editorial version published by Denver Business Journal 4.13.12

As the CEO of an organization deeply focused on efforts to make Colorado’s health care better and less expensive, I get a lot of questions about the Affordable Care Act (ACA, Federal Health Care Reform, aka Obamacare). Many assume that if the Supreme Court strikes the law down, the work of CIVHC and many other partner organizations somehow goes away and we hit a big re-set button for our work.  Nothing could be further from the truth. 

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Shedding Some Much Needed Light on the Health Care Market

As an economist, I understand all too well that there can be no meaningful and well-functioning market without accessible and actionable information to inform consumer choices. Health care is no exception, yet we currently have very few places to turn for data that helps us make educated purchasing decisions that drive value into the system. Fortunately this situation is beginning to be addressed nationally through Health Care Cost Institute’s (HCCI) national claims database and CIVHC’s more robust Colorado All Payer Claims Database (APCD).

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No Magic Bullet for Health Care Reform

Rarely does a day go by that I don’t run into another article arguing the efficacy of health care reform tactics such as medical homes, Medicare payment reform, and Electronic Health Records (EHR). A recent example is “Do Electronic Medical Records Save Money?” by the New York Times. The piece reveals the results of a 2008 federal survey showing that physicians using electronic records actually ordered more high cost tests than their peers who were still using paper medical records. This is contrary to the belief that EHR systems have the potential to save costs by reducing the number of tests being ordered.

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Getting Patients to Choose a Honda Over a BMW

An email with the subject line “Patients Prefer High Cost Care” came through my inbox a few weeks ago. It was spurred by a recent study in Health Affairs revealing that patients would typically select a higher cost service like an MRI over a lower cost CT scan even after being educated on the marginal difference between the results.

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Bundled Payments: The Process Begins with the Patient

Three national experts in bundled payment design and implementation spoke to a packed auditorium of more than 150 health care executives in Denver last week at CIVHC’s Bundled Payment Seminar to make the case that bundled payments are changing the face of health care across the country and illustrate how Colorado providers, payers and purchasers can—must—embark on this path. The consistent message from all presenters was that bundling is not just, or even first, about controlling costs. It is a critical technique for improving quality and creating a more patient-centric health care system.

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Making Sense of Variation in Colorado Health Care Pricing

Medicare made news recently by releasing data demonstrating variation in hospital inpatient and outpatient charges and payments. Colorado is uniquely positioned to couple the Medicare information with other payer data contained in the Colorado All Payer Claims Database (APCD) to better understand and identify variation in our own backyard. Medicare’s data showed substantial variation between prices charged and actual payments, which in the world of health care isn’t exactly new news. Nor is the fact that charges for similar services by one hospital can be vastly different than the one down the road. Making the data public for the first time, however, does give us an opportunity to review Medicare payments alongside commercial and Medicaid payments in Colorado to start making sense of it all.

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Protecting Colorado Health Data While Making Costs Transparent

The news is riddled with stories of frustrations over the cost of health care and the lack of transparent information available to patients and employer purchasers. Look at the responses to the recent Time magazine article about bloated hospital costs, and the release of Medicare information about the wide variations in hospital pricing: consumers are aghast at high and wildly varying prices, especially in light of little information about quality.

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CBO report: Silver Lining for controlling health care costs

This week, the Congressional Budget Office (CBO) released an analysis of 10 Medicare demonstration projects undertaken over the last 20 years. All were designed to save the program money, but only one succeeded in doing so. Do these findings mean we should abandon efforts to redesign our country’s health care payment and delivery systems?

Not at all. In fact, when you look below the surface of the CBO report, you reach precisely the opposite conclusion. The reason most of these pilots did not achieve their desired goals is because they were built upon our existing fragmented delivery and fee-for-service/pay-for-piecework system—a system that incents more, not better care, pays a second time for avoidable complications and provides no and incentive for care coordination and better outcomes.

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Physician Leadership: An Idea Whose Time Has Come?

Lately there have been articles in journals like JAMA and Health Affairs discussing the need for physician leadership in reshaping the system. It isn’t that there hasn’t been this need before. Because of the central role granted to physicians by law and by culture, we have always needed physicians to agree, explicitly or implicitly, to changes to the delivery system. Indeed, I call the last model of physician accountability for health care the “infinite power for infinite responsibility” model. Because we had no way of measuring physician performance in the last age, how else were we going to deal with matters that were literally life and death? If you are dealing with a phenomenon that frightens us all, you want to give your agents all the power you can.

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Colorado Providers - Importers or Exporters of Services?

A potentially game-changing innovation for improving quality and controlling costs arrives on the health care scene next month. Unfortunately, though, Colorado health care facilities are not part of it…yet.

Beginning in 2014, large national employers including Wal-Mart and Lowes, will begin offering their employees the opportunity to travel to national Centers of Excellence (CoE’s) for total hip and total knee replacements. If the employee travels to the CoE for care, they will have no out of pocket costs for any of their treatment and all travel and meal expenses, for the employees and a “helper/companion”, will be paid for by the employer. (see [Insert link] for more details). There are no Colorado providers on this CoE list and, as a result, Colorado will begin exporting some of its most profitable medical procedures beyond its borders beginning next month.

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Costs go up, costs go down. What does it all mean?

Two interesting data points about health care spending have emerged in the last week that, at first, may seem contradictory. Actually, though, they are entirely complementary, and both illustrate the need to continue efforts to control costs and improve quality in the health care system.

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Tipping Point on Health Care Prices?

Captain Renault in “Casablanca” was “shocked – shocked!” to discover there was gambling taking place in Rick’s Café. Of course, he wasn’t shocked at all; in fact, he uttered that line as he was being handed a pile of money by a croupier. That brief encounter brilliantly encapsulated a cynical culture in which everyone was on the take, yet pretended they weren’t.

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Debt, Data and Deciders

The landscape in American health care is changing, and it's affecting us here in Colorado. At CIVHC we talk about three major trends in American health care: debt, data and deciders. These tsunamis of change are affecting every aspect of American life, not just health care.

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Risk Adjustment and Burden of Illness in Colorado: APCD Total Cost of Care Compared to Expected Reports

Part II: Understanding health care claims data available on

Last month, in the first installment in this series, I explained risk adjustment and burden of illness concepts in more or less plain English to give readers and my fellow health data policy wonks (there’s that word again!) a better sense of what these concepts mean in practice. In this second installment, I will demonstrate how these concepts apply to the Total Cost of Care Compared to Expected (C2E) reports available on

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Refreshing Thinking on the ACA

At the risk of sounding like a heretic and being forced to revoke my lifetime membership in the Health Policy Wonk Association, I confess that I’m tired of reading about Obamacare.

Don’t get me wrong. I still support the law and believe it’s the right approach, while acknowledging that the political compromises built into it and its somewhat ham-handed implementation have curtailed its effectiveness. But I believe those glitches will be worked out in time. That’s the way both laws and markets work – they find their equilibrium over time.

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Consumers are More Than Ready

My two 79 year-old parents recently marveled at the ease at which they can see results from lab tests and x-rays from University Hospital’s patient portal at their own convenience before going to see their doctors for their follow-up visit. They were thrilled that their personal health information is available to them, right in front of them, just as their physician sees it. And shouldn’t they? This is their health information and it’s vital to help them engage and take care of themselves.

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Getting Mad with the APCD

When people have to pay more than others for the same services, and the reasons are unclear, it’s not surprising when anger ensues. We’ve seen this play out recently with the health insurance rates in Colorado’s resort communities, and Colorado’s Division of Insurance has responded by evaluating data to search for potential solutions. It was a perfect illustration of how data from the All Payer Claims Database can inform those debates and help shape responses.

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Retooling For the Information Glut Age: Five Things Physicians Should Do To Lead

In the last post, I talked about what physicians should stop doing if they wanted to have a leadership position in the rapidly evolving healthcare world. In the spirit of bringing solutions and not just problems, today’s list is five things that I think we as physicians collectively should start doing.

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Why are Prices so High in Health Care?

Jay-Want-for-print.jpgFor many years we have been assuming that if Medicare costs were low in a particular region, like Grand Junction on our Western Slope, then commercial insurance costs were also likely to be relatively low.



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