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DIABETES PRACTICE

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OPTIONS

Improving Patient Care Through Increased Practice Efficiency

NOVEMBER 2011 EDITORIAL

CONTRIBUTORS

Will Health Reform Survive 2012? By Michael Bihari, MD, contributing editor

Christine Kelly

Donald E. Moore, MD

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he Affordable Care Act remains controversial due to the country’s economic woes. Some of the provisions of the act have not yet been implemented. Changes in the political makeup of Congress as well as who occupies the White House in January 2013 could significantly affect the most contentious provisions of the health reform legislation, including the individual insurance coverage mandate, the employer insurance mandate, and the implementation of health insurance exchanges. Although it is not clear what the economic fallout of the legislation has been or will be, both those for and against the law have made unsubstantiated claims. Massachusetts enacted health reform legislation in 2006. By many accounts it has been a success. More than 98% of state residents have health insurance, and the law has only added 1% in new costs to the state budget. The legislation has popular support with most residents and is applauded by most primary care physicians and physician groups. Continued on page 2

IN THIS ISSUE 3 | DIABETES STRATEGY Mobile Phone Applications Facilitate Ongoing Diabetes Management

6 | Q&A Physician, Consultant Discuss Leading Their Practices to Meaningful Use With EHR Adoption

8 | CAPITAL IDEAS Consider an Alternative Cash Income Strategy to Augment Retirement Investments

10 | DISEASE MANAGEMENT Page 3

Program Helps Patients With Chronic Illness Reduce Medications, Increases Practice Revenue

13 | HEALTH REFORM IOM Recommends Criteria, Methods to Develop Essential Health Benefits Package

14 | PRACTICE MANAGEMENT NEWS NCQA Program to Emphasize Patient in the PCMH Model


EDITORIAL EDITORIAL BOARD

Continued from page 1

Neil Baum, MD Urologist New Orleans

Peter R. Kongstvedt, MD P.R. Kongstvedt, LLC McLean, Va.

Daniel Beckham President The Beckham Co. Bluffton, S.C. Physician and Hospital Consultants Whitefish Bay, Wis.

John W. McDaniel President and CEO Peak Performance Physicians, LLC New Orleans

Harold B. Kaiser, MD Allergy & Asthma Specialists, PA Minneapolis Nathan Kaufman President The Kaufman Group Division of Superior Consultant Co. Inc. Physician and Hospital Consultants San Diego

Lee Newcomer, MD, MHA Senior Vice President, Oncology UnitedHealthcare Minneapolis

Many health reform critics fear that employers will decrease employees’ coverage because of increased costs. But the number of employers in Massachusetts offering employees health insurance has increased, bucking the national trend. When the economic crisis hit and people lost jobs, public sector insurance increased to cover the gap. Many provisions of the Affordable Care Act, including the health insurance coverage mandate, are modeled after the Massachusetts legislation.

James M. Schibanoff, MD Editor in chief Milliman Care Guidelines Milliman USA San Diego Jacque Sokolov, MD Chairman Sokolov, Sokolov, Burgess Scottsdale, Ariz.

Michael Bihari, MD

STAFF Editor Rev DiCerto 845/398-5100 editor@premierhealthcare.com Art Director Meridith Feldman

Publisher Premier Healthcare Resource, Inc. 150 Washington St. Morristown, NJ 07960 973/682-9003; Fax: 973/682-9077 publisher@premierhealthcare.com

This newsletter is published by Premier Healthcare Resource, Inc., Morristown, N.J. © Copyright strictly reserved. This newsletter may not be reproduced in whole or in part without the written permission of Premier Healthcare Resource, Inc. The advice and opinions in this publication are not necessarily those of the editor, advisory board, publishing staff, or the views of Premier Healthcare Resource, Inc., but instead are exclusively the opinions of the authors. Readers are urged to seek individual counsel and advice for their unique experiences.

2 Practice Options/November 2011

According to a Rasmussen Report published in October, 51% of likely 2012 voters favor repeal of the Affordable Care Act and 57% say it will drive up costs. Similar polls indicate the majority of Americans are concerned about the increased cost of health insurance related to the legislation. It is unclear if this concern is justified. The cost of health insurance premiums continues to rise, but typically the increases are secondary to the increases in the cost of health care, especially diagnostic procedures. In October the Obama administration requested that the U.S. Supreme Court decide if the Affordable Care Act is constitutional. Specifically, the justices will hear arguments for and against the requirement that all Americans have health insurance coverage. The court’s verdict, if delivered by June 2012, could have a significant impact on the 2012 presidential and congressional elections. It’s going to be a very interesting year! ■ More information is available at www.DiabetesOptions.net


DIABETES STRATEGY

Mobile Phone Applications Facilitate Ongoing Diabetes Management

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obile device technology has prompted the development of new tools to help diabetes patients monitor their condition. A number of smart phone applications allow patients to record their glucose levels and other data, while wireless glucometers can automatically send glucose results to a centralized database. However, two next-generation mobile applications—DiabetesManager, developed by WellDoc, Inc. in Baltimore, and Care4Life, developed by Voxiva in Washington, D.C.—move beyond a simple recording function to play an even larger role in diabetes disease management by providing patients with ongoing coaching and care reminders. These applications not only facilitate patient self-care; they also assist providers by supporting care recommendations between visits and offering more complete and accurate information upon which to base treatment recommendations.

Improving Care Mobile disease management solutions offer several potential advantages for the management of chronic diseases such as diabetes, heart failure, and

hypertension, notes Richard Katz, MD, professor of medicine in the Department of Medicine and director of the Division of Cardiology at George Washington University Hospital. Katz also serves as the medical monitor for the National Institutes of Health’s Diabetes Prevention Program Coordinating Center, which is located at George Washington University. “Mobile health applications engage patients by enhancing their knowledge base and self-management skills,” he says. “Reminders that prompt adherence to medications and blood glucose testing schedules, as well as educational information related to the disease and lifestyle-related influences, can be very helpful. Also, instead of receiving feedback only during relatively short office visits, patients using mobile health applications receive ongoing coaching, support, and instant feedback about their health status.” The advantages of mobile health applications extend to physicians as well, helping them improve their efficiency and care quality. “Mobile health applications ensure that providers have automatic access to trended blood glucose data,” notes Katz. “Blood glucose logs can be incomplete, difficult to

quickly evaluate, or left at home. In contrast, monthly reports generated by mobile health applications summarize patient-reported glucose data along with the patient’s medication list and other health indicators. Such reports can help physicians quickly identify major health issues to address during the visit. Providers are sometimes slow to react. They may tell a patient, ‘Your blood sugar is a little high; keep trying and maybe we’ll make an adjustment next time.’ Having access to trended data may prompt physicians to respond more quickly with a treatment adjustment.” “In a managed care setting, using a mobile health program as an adjunct to standard care may result in lower costs of care thanks to reduced emergency department visits and hospitalizations,” says David Lindeman, PhD, director of the Center for Technology and Aging and co-director of the Center for Innovations and Technology in Public Health at the Public Health Institute, located in Oakland, Calif. “Mobile health technologies can also improve physician-patient communication as well as provider and patient satisfaction with care.” To a growing extent, diabetes care quality is being tracked against care standards promulgated by organizations such as the American Diabetes Association, the Healthcare Effectiveness Data and Information Set (HEDIS), and individual health plans. “Therefore, physicians require a consistent, accurate way of tracking care indicators so they can meet as many of these goals as possible,” says Katz. The increasing use and sophistication of mobile health applications have prompted the U.S. Food and Drug Administration (FDA) to consider their safety. In July, the FDA released guidelines on mobile medical applications to inform manufacturers and distributors as to which applications will require the agency’s review and approval. According to draft guidelines, the FDA will regulate medical Continued on page 4 Practice Options/November 2011 3


DIABETES STRATEGY Continued from page 3

applications for smart phones that can directly affect a patient’s health, particularly those that present a high risk when not used as intended.

solution prompts patients to enter blood glucose values, medications taken, and food intake based on their daily treatment plan. Patients can also add a note to these values to describe any special circumstances at the time of data entry. If the patient’s glucose value is in the target range, he or she receives an encouraging or educational message. Alternatively, the patient will receive a message regarding how to treat a high

tact can receive a monthly or quarterly summary report. Provider reporting can be customized to fit the provider’s workflow.” In a cluster-randomized clinical trial Interactive Care of DiabetesManager published in the DiabetesManager and Care4Life proSeptember issue of Diabetes Care, vide prompts regarding self-care activiUniversity of Maryland researchers ties and integrate the patient’s treatfound users had a mean decline in ment plan with evidence-based clinical HbA1c levels of 1.9% over one year, guidelines to provide real-time coachcompared with a decline of 0.7% in ing based on self-reported patients receiving usual values. Providers can check care. “We found that the The timing and content of messages are use of a mobile health data trends online as frequently as they wish, and are intervention was benefitailored to fit each patient’s particular sent a periodic summary cial for patients whose needs related to medication schedules report with trended data blood glucose was severely and target blood glucose values. that they can use in making out of control as well as for treatment decisions. those whose levels were “Patients register for only mildly elevated,” says DiabetesManager online and provide or low blood glucose level. Patients can lead author Charlene Quinn, RN, PhD, information regarding medications, also send a secure message to their assistant professor in the Department medical history, and self-management providers. At any time, providers can of Epidemiology and Public Health at routine,” explains Malinda Peeples, RN, view an online list of patients to review the University of Maryland School of CDE, vice president of clinical advocacy patient messages and trends in values; Medicine in Baltimore. at WellDoc. “Then, the mobile phone providers who want only episodic con“The clinical trial showed a remark-

EXPERTS: UBIQUITY OF MOBILE TELEPHONES MAKES THEM PERFECT FOR REACHING DIABETES PATIENTS obile phones are a great patient empowerment tool,” says Malinda Peeples, RN, CDE, vice president of clinical advocacy at Baltimore, Md.-based WellDoc, developer of the DiabetesManager mobile telephone application. “Our cell phones are with us all the time, and we have already bought into the concept of using mobile phone applications to enhance our lives. Mobile phone ownership crosses all economic, geographic and age-related boundaries, meaning that applications are available to virtually anyone. Ongoing support for patients between provider visits can be crucial for keeping patients on track by helping them integrate diabetes care into their daily lives, especially since office visits can occur several months apart. Mobile phones give us the opportunity to put a ‘coach in our pocket’ to support self-management.” “Diabetes can be an overwhelming disease due to the many required lifestyle changes, including modifying diet, increasing physical activity, taking medications appropriately and attending care visits,” says Justin Sims, CEO of Washington, D.C.-based Voxiva, which developed the Care4Life diabetes care application. “Mobile phone applications represent an excellent method for

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supporting these lifestyle changes during the gaps between provider visits.” “Mobile applications are a relatively low-cost method for reaching patients with a variety of chronic diseases,” says David Lindeman, PhD, director of the Center for Technology and Aging and co-director of the Center for Innovations and Technology in Public Health at the Public Health Institute in Oakland, Calif. “The costs of the technology are declining while the ability to manage information is increasing, particularly as mobile applications can be linked into electronic medical records and clinical databases.” These tools are particularly useful for underserved populations. “Because most people have cell phones, mobile health applications represent a low-cost, effective way to monitor health, communicate with patients, and extend the reach of clinicians beyond the office,” Lindeman points out. They may also be particularly beneficial for serving adolescents. “Mobile applications offer an easy, appealing way for teenagers with diabetes to communicate their health values and receive messages about diabetes care,” notes Lindeman. “Receiving health-related information via text feels very natural to this population.” —DJN


able lowering of HbA1c, more than most single drugs have been able to accomplish,” Katz adds. Researchers at George Washington University Hospital have been studying the use of DiabetesManager in several community clinic demonstration projects and are now introducing the application into the hospital’s diabetes outpatient and general medicine clinics. “We are also creating an interface between DiabetesManager and our practice’s electronic medical record,” Katz says. “This will make it much easier for us to quickly evaluate the data and use them to inform treatment decisions.” Given that about half of diabetes patients also have hypertension, Katz and colleagues are also testing a version of DiabetesManager that includes a hypertension module that will allow patients to self-report blood pressure levels. This study is funded by a McKesson Foundation Mobilizing for Health Grant.

Tailored Approach Care4Life’s five key components include personalized educational and motivational messages; medication reminders and adherence tracking; self-monitoring of blood glucose levels; goal setting and tracking for diet, weight, exercise and medication adherence; and appointment reminders. Care4Life includes secure text messaging along with a Web-based personal portal that patients can use to enter data and receive content. When patients enroll, their providers help them set appropriate goals for weight, exercise, and glucose control. Patients using the application receive text messages that prompt them to input health indicator values and adopt healthy behaviors. “Messages remind users to take their medications and check and report their blood sugar levels,” explains Lindeman, adding that automated algorithms provide appropriate responses based on the data

received from the patient. The timing and content of messages are tailored to fit each patient’s particular needs related to medication schedules and target blood glucose values. Patient-reported data are then transferred to a Web-based portal. Providers and patients can print reports or log on to the Web-based system to view data. “The application provides real-time, patient-specific data and alerts to providers as well as periodic summaries of patient indicators,” explains Justin Sims, CEO of Voxiva. Led by Lindeman, the Public Health Institute is currently performing an independent test of Care4Life at the Family Health Centers of San Diego, a private, non-profit health clinic serving low-income, medically underserved individuals. This research is also being funded by a McKesson Mobilizing for Health Grant. ■ —Reported and written by Deborah J. Neveleff, in North Potomac, Md.

RESEARCHERS OFFER PHYSICIANS TIPS ON USING MOBILE HEALTH APPLICATIONS obile health applications designed to utilize patients’ cellular telephones to help them maintain proper care of their diabetes are just one part of a system of chronic care provision, notes Richard Katz, MD, professor of medicine in the Department of Medicine at George Washington University Hospital. “The key is to figure out how to maximize the added value from incorporating a new tool into the workflow,” he says. For example, he explains that demonstration projects of the DiabetesManager application being conducted at George Washington have involved case managers, physician assistants and nurse practitioners who review the summary reports and communicate with patients; physicians define the circumstances under which they should be notified of a patient’s change in health status. In addition, providers should learn how to interpret mobile health information. “Health providers require education about how the system may add to their understanding of a particular patient,” Katz notes. “Merely setting up the mobile phone communication system is insufficient; practices need to figure out how to actually use the data.” He adds, “Providers need to tell patients that they perceive these data to be valuable and are evaluating and using them; otherwise, patients will get bored and stop using the application.”

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“Certainly, mobile health applications can be helpful in prompting patient self-management,” adds Charlene Quinn, RN, PhD, assistant professor in the Department of Epidemiology and Public Health at the University of Maryland School of Medicine in Baltimore and lead author of a randomized clinical trial of DiabetesManager published in the September issue of Diabetes Care. “However, providers should be aware that data tracking itself is not sufficient to improve health outcomes in diabetes patients; rather, it’s the communication between patients and providers that makes the data meaningful.” “This is an evolving field, with a lot of potential to improve outcomes and patient-physician communication,” notes Katz. “Physicians must be patient, and should provide feedback as to how to incorporate the data into the workflow.” “Physicians who see the promise of these technologies should become involved in their development to guide how they can be incorporated most naturally into patterns of care,” adds David Lindeman, PhD, director of the Center for Technology and Aging and co-director of the Center for Innovations and Technology in Public Health at the Public Health Institute in Oakland, Calif. “Mobile health technology use and reimbursement are likely to be key issues in the national health reform debate.” —DJN

Practice Options/November 2011 5


Q&A

Physician, Consultant Discuss Leading Their Practices to Meaningful Use With EHR Adoption We knew we needed a project plan, dashboards (offered through Sage Practice Analytics) and needed to upgrade to the certified version of meaningful use software. We also made the decision to purchase and implement the practice portal this year instead of next to remain ahead of the curve for the next set of requirements for level 2 certification. Finally, it was paramount that the physicians and office management embraced the need for meaningful use and set the example for the entire pracLocated in Maryland with clients Donald E. Moore, MD, operates tice. The practice leadership at throughout the U.S., health infora solo physician practice in Diamantoni & Associates recognized mation technology consultant Brooklyn, N.Y. Over the past few that they needed to do more than just Christine Kelly of CMK months, he has led his clinic and talk the talk. They took on the job of Consulting recently helped staff through Stage 1 meaningful adding rigor to reporting. Diamantoni & Associates of Moore: We got on the road to use attestation using the Sage meaningful use five years ago Lancaster, Penn., achieve Stage 1 Intergy Meaningful Use Edition, a when we implemented the Sage Intergy of meaningful use. The five office certified solution that includes EHR system. Not to say that meaningpractice, 18-provider group integrated EHR, practice manful use has been around that long, but received more than $300,000 in agement, patient portal and clinonce we learned of EHRs, we knew it federal incentive payments. ical quality measures reporting. was the path to the future of health care. EHRs strengthen the clinical decisionHow did you prepare your respec- them as soon as possible. It was nice to making process. The effects of one’s tive practices for meaningful use? let someone else chase down the legisla- decisions are much more easily tracked. Kelly: Diamantoni & Associates tion changes. We relied on the REC for We immediately recognized that this were well positioned for meaning- support with the federal language and would lead to better outcomes. There’s ful use before it was introduced. They incentives. Since the rules were con- no doubt that the meaningful use of the were early Sage Intergy EHR Sage EHR allows for better adopters. Each office and care. physician was using the sysWhat do you see as the “There is no such thing as tem and wanted to get more promise of meaningful too much training.” out of it. They brought me on use? to help them in terms of —Christine Kelly, CMK Consulting, Lancaster, Penn. Kelly: The real reporting and data analysis. promise of meaningful All this data collection use is improved outcomes deserved an analytical payoff. for patients and improved data analysis stantly changing, we wanted to ensure for physicians. A new focus on clinical We began in early 2010 by attending we had someone on our side who could data analysis will allow providers firm every meaningful use meeting we could keep their finger on the pulse of develnumbers when evaluating their patient find and reviewed the initial proposal oping issues. They are still changing. outcomes. Meaningful use is a terrific and the final rule. We contacted our We knew Sage would come through incentive to further use all the data colregional extension center (REC) once it with the meaningful use certification lected in our EHR and shift focus to was named and looked to partner with and they didn’t disappoint us.

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where we can get it working for us. need to be long established before a ware and hardware, but the decrease in Being able to easily provide patients patient enters the lobby. productivity and workflow changes in with their results will hopefully get moving from paper to electronic Physicians need to be part of the more patients engaged in their care. records. The changeover was the most planning process, since they are the Moore: Meaningful use will require ones who know what needs to happen difficult to prepare for because we were more widespread use of EHRs. This will in terms of care. Office staff needs to not able to fully understand what would help us as physicians to collaborate and happen until we lived it. help them document the work they are to streamline care within our practices. already doing so their efforts are What advice do you have for others My EHR makes it easier to track reports reportable. looking to achieve Stage 1 of meanand manage patient data. These innovaDid you encounter any surprises ingful use? tions will lead to better clinical practices related to meaningful use or attesKelly: Build relationships with and a better health record. The EHR has tation? support organizations that you led me to stronger financial results, as trust: your software company, your well. Based on the power of REC. Engage every person the record, I have been able to working in your practice to “EHRs strengthen the clinical bill more accurately and for be involved in the process. more services. A more comdecision-making process. The effects This is not something one prehensive medical record person can do alone. of one’s decisions are much more supports billing for higher levFinally, when making a els of care. Having more inforeasily tracked. We immediately decision on certified meanmation on hand, I am more ingful use software, take a recognized that this would lead likely to be able to come to a close look at the reporting to better outcomes.” more exact diagnosis more tool the EHR offers. If the efficiently. reporting tool isn’t there or —Donald E. Moore, MD, Brooklyn, N.Y. Ms Kelly, how is meanis sub-par, you will not be ingful use changing able to move forward. Get employee engagement in the the software installed and get training. Moore: Nothing really surprised Diamantoni practice? me during the meaningful use Work a month and then get more trainKelly: We have every single ing. There is no such thing as too much process. We were doing many of the employee talking about meaning- things related to meaningful use training. ful use measures and the procedures already. It was welcome news to see how Moore: Do your research. Find that need to be in place to continue to much of what we were being asked to the knowledge you need to make achieve them. It has caused us to look at do, we were already doing from a clini- decisions in selecting the EHR that best setting practice standards for a patient cal and practice management perspec- suits your practice. Once the EHR is in encounter. To be successful, large prac- tive. What meaningful use did was to place, exploit its functionality to mantices need processes to be documented. take various aspects of our care process age the clinical and financial aspects of The patient encounter needs to be and place them into a nice little pack- the practice. This is the essence of the defined by the practice. The process age. concept of meaningful use from the used to engage the patient needs to be The biggest challenge I faced was provider’s perspective. ■ established from the moment a patient financial. It was not the cost of the soft- —Edited by Rev DiCerto enters the clinic. Paths and protocols

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SURVEY: MEANINGFUL USE IS STILL STRONGEST DRIVER he results of a survey released in August 2011 by the Tampa, Fla.-based Sage Healthcare Division (www.sagehealth.com), the manufacturer of the Sage Intergy EHR system, indicated that “meaningful use incentives are still one of the strongest drivers for most physicians (64%) to implement EHR technology.” However, “for 32% of those physicians who are in the market for an EHR, insufficient capital is still a key challenge to move to an EHR,” the survey report stated. Sage’s survey was conducted

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nationwide among physicians currently using EHR systems or who are currently in the market to purchase one. “EHR users said they measure their EHR success through reporting and tracking health care outcomes (64%) and error reduction (62%), but those who have yet to purchase EHRs responded that they would measure EHR success through increased practice revenue (74%) followed by reporting and tracking of health care outcomes,” the survey report said. —RD

Practice Options/November 2011 7


CAPITAL IDEAS

Consider an Alternative Cash Income Strategy to Augment Retirement Investments By David Mandell, JD, MBA, and Dinah Bird, PhD, CFP, CIMA

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he leading strategies employed for generating cash to live on during retirement include periodically liquidating a portion of one’s investments, allocating heavily to a ladder bond portfolio or dividend-producing stocks, and purchasing an annuity. Each of these strategies has advantages and disadvantages. Even used together they may be insufficient to generate the cash flow needed to sustain a physician’s lifestyle during retirement.

Pros and Cons Almost all retirees’ planning includes the strategy of liquidating investments. The retiree periodically sells assets such as IRAs, personally held securities and investments, real estate, the family home, or a business to generate cash to live on. However, timing the sale of an asset can be tricky, as many retirees can attest to in the aftermath of the stock market crash of 2008. The investment may be discounted 30% to 50% at the time you need to sell. In addition, when selling almost any asset, you will pay capital gains taxes at both the federal and state levels that can eat up 25% of the gains from the sale. For distributions out of a qualified retirement plan or IRA, the tax bite can be as high as 45%. Relying significantly on liquidation of assets means being subject to these taxes and to the risk that rates will increase. Since federal capital gains tax rates are currently at the lowest in their history, being subject to future tax increase is not a risk to overlook. In a laddered bond portfolio strategy, an investor purchases a group of bonds with different maturity dates, attempting to match cash flows with the demand for cash following retirement.

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David Mandell, JD, MBA, is an attorney and principal of the financial consulting firm O’Dell Jarvis Mandell LLC, where Dinah Bird, PhD, CFP, CIMA, is the director of institutional development and portfolio manager. They can be reached at 877-656-4362 or through their Web site, www.ojmgroup.com. One bond might mature in one year, another might mature in three years, and the remaining bonds might mature in five or more years. Unfortunately, as inflation rises, the bonds in the laddered portfolio do not keep up with buying power. The interest the bonds pay may not change, but the investor can purchase fewer goods with the same amount of money. Also, as rates rise, the price of a fixed-rate bond will fall. Consider the problems of allocating a substantial amount of money to a laddered portfolio in light of today’s interest rate environment, in which a seven-year treasury pays 2.875%. Moreover, stock dividend payouts are based on a percentage of the stock’s price. As the market fluctuates, so does the yield from the stock. The stock dividend will decrease if the market takes a downturn. A life annuity (not a variable annuity) is designed to pay interest and principal back over the investor’s lifetime.

The physician writes an insurance company a check and is paid monthly, quarterly, or annually for the rest of his or her life. The amount the insurance company pays is fixed and will not decrease if the stock market crashes or if interest rates fall. If the investor outlives his or her life expectancy, the insurance company continues to pay the investor or the spouse for life. However, since interest rates are at historic lows, annuity payment rates are also extremely low. Their internal rate of return is therefore very poor. As with any insurance product, the strength of the insurance company is also a factor; only the strongest carriers should be considered. The inflation risk to this technique also weakens its attractiveness. If inflation reaches levels seen in the early 1980s, with the prime rate at 21% or even 8%, a 3% annual check from an annuity is not as attractive. For these reasons, a life annuity should not be heavily relied upon.


Case Study

erate the cash she needs to live on. have investments for as long as she Abby is an allergist on the brink of Inflation will probably cause the price lives. retirement at 62. She has social securi- of her bonds to decrease as she liquiOne alternative income strategy proty, a $1.2 million home, a 4% life annu- dates them for cash. vides a diversified cash flow stream ity on a $500,000 policy, and a 50/50 Abby’s investments will most likely from hard assets in the form of an investment portfolio of stocks and not sustain her for the 28 years, and her investment security called a real estate bonds valued at $3 milinvestment trust (REIT). lion that is a combinaAccording to the law, at least Each of [the leading cash-generating tion of her IRAs, 90% of the cash flow streams 401(k)s, and savings. strategies for retirement] has advantages generated from properties in Abby enjoys semiREITs must be passed to the and disadvantages. Even used together annual vacations but investor. REITs can be an otherwise expects to inflation hedge; as inflation they may be insufficient to generate the easily live on $200,000 increases, property rents usucash flow needed to sustain a physician’s income per year durally increase, as does the value lifestyle during retirement. of the property. REITs typicaling retirement. She is ly offer a low correlation to the in good health and, U.S. stock market, which due to her family history, expects to live to be 90. She has a portfolio will be depleted before her means that REITs help decrease volatillong-term care insurance policy that death. Abby may experience the num- ity. There are two types of REITs availwill pay her $10,000 annually. ber-one fear of retirees: running out of able to investors: public traded REITs (PTs) and public non-traded REITs Abby decides to keep her house to money in retirement. (PNTs). Typically PNT REITs pay subavoid selling at a loss. She forgoes a stantially higher dividends. reversible mortgage because of high A New Solution fees. Current inflation is benign at An “alternative cash income strategy” Under a PNT REIT-based alternative 1.7%. Table 1 shows Abby’s total in- is one that combines traditional invest- income strategy, an investor buys into a ments like stocks, bonds, currency, or REIT portfolio, which will generate flows of money. Subtracting her major hard assets like real estate to create a about 6.5% income to supplement the outflows of $50,000 in income tax and $30,000 in property tax on her home, unique portfolio designed to generate money needed for expenses. cash income. The alternative income Consequently, fewer securities will for a total of $80,000, from her income leaves her with a net income of $45,000 solution can help Abby overcome her need to be sold out of the retiree’s portshortfall. Instead of liquidating her folio, which in turn should generate annually, representing a shortfall of portfolio of stocks and bonds for cash more growth in their investments. $155,000 per year. Abby will need to liquidate stocks each year, she can add alternative cash Adding PNT REITs as an alternative income to her bond portfolio. She will income to an investor’s portfolio has and bonds in her investment portfolio to make up the cash shortfall. She will boost her income, provide an inflation the potential to augment conventional also likely need to liquidate some stock hedge, and liquidate fewer stocks and strategies by enhancing cash flows and when the market is down due to nor- bonds, allowing her portfolio to grow. extending the life of the retiree’s investThis strategy will help extend the life of ment portfolio. mal fluctuations. Consequently, Abby Generating income throughout will have to sell even more stock to gen- her investment portfolio so she will retirement is a challenge. The commonly used techniques all have significant risks associated with them. TABLE 1. ABBY’S INCOME STREAMS Therefore, the use of alternative income techniques is often recomSocial Security $30,000 mended to augment traditional techniques. Physicians preparing for retireAnnuity payments (4% of $500,000) $20,000 ment should consider contacting a Dividend payments from 50% in stocks (2.00%) $30,000 financial adviser to learn about the Interest payments from 50% bond ladder of advantages an alternative income tech1-10 years (3.00% blended yield) $45,000 nique featuring a PNT REIT can provide them. ■ Total in-flows $125,000

Practice Options/November 2011 9


DISEASE MANAGEMENT

Program Helps Patients With Chronic Illness Reduce Medications, Increases Practice Revenue

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he increasing incidence of Wilson says. “What attracted me to the chronic conditions such as dia- FirstLine Therapy program the most betes and hypertension in was that it had a very well designed and recent years has placed a heavy burden structured eating plan that could be on the health care system. According used to treat all the different sorts of to the National Diabetes Fact Sheet, chronic diseases I was seeing. I built released in January of this year by the the whole lifestyle education portion of Alexandria, Va.-based American my practice around that.” Diabetes Association, an estimated The system centers around a lifestyle 25.8 million Americans currently suf- modification plan that relies upon a fer from diabetes, including an esti- modified low-glycemic, Meditermated 18.8 million cases that have not ranean diet, which can be augmented yet been diagnosed. The cost of diag- with the addition of a medical food. nosed diabetes to the U.S. health care Patients are coached on what to eat and system in 2007 was $174 billion, the when, and given advice about exercise. John Wilson, MD Fact Sheet indicates. The ultimate goal is improvement of While such chronic conditions can patients’ blood sugar levels, and possibe effectively managed for many bly being able to discontinue or avoid to help determine patients’ body compatients through lifestyle modifica- ever having to start patients on med- position. Within just a few days, over a tions, for some patients—and for ications for their conditions. weekend, we were able to start seeing patients who have difficulty adhering To begin using the system, Wilson and counseling patients.” to or are unwilling to adhere to a new first had to attend a three- to four-day lifestyle regimen in particular—med- course and obtain FirstLine Therapy Managing Chronic Conditions ical management is a viable option. certification. After receiving his certifiWhen a patient enters Wilson’s office However, an increasing whom the FirstLine proshortage of primary care gram could benefit, providers makes this growWilson begins with simple “I think I could do a talk in grand ing population of patients counseling. “I tell the rounds and easily convince other increasingly difficult to patient that his or her conmanage. John Wilson, MD, dition can be modified to doctors that this would be the owner of a small, solo a great extent by adopting beneficial to their patients.” primary care practice in a better lifestyle,” he says. Daly City, Calif., has found “I usually talk about the —John Wilson, MD, private practice, Daly City, Calif. risk factors: if you’re overan effective and inexpenweight, if you’re eating a sive way to treat this patient lot of sugars and carbs, about the bengroup in the FirstLine Therapy pro- cation, “I decided the most effective efits of changing the way you eat to gram, a lifestyle modification system way for me to implement the system avoid a lifetime of being on medicadeveloped by nutrigenomics and would be to hire a lifestyle educator, tion, or having to take long-term medlifestyle medicine company someone who could spend a lot more ication. When people hear that they Metagenics, of San Clemente, Calif. time than I could coaching the patients have the option of continuing as they and working with them,” Wilson says. Addressing a Need are and being on medication or chang“At that point Metagenics came in “I was seeing a lot of chronic diseases and gave us a turnkey setup,” he coning what they’re doing and staying like diabetes, hyperlipidemia, hyper- tinues. “I had a room in my office that away from the medication, 90% of them say yes, they want to try whatevtension, obesity, fatigue, and metabolic I dedicated as a therapy room to do all er will keep them from having to take syndrome. Those kinds of conditions the counseling. I bought a BIA [biopills. are very common in my practice,” electrical impedance analysis] machine

10 Practice Options/November 2011


“I then give them a folder that the patient’s condition around.” want the diet to be a little better than explains the program and order a set that. of lab tests,” he continues. “Then I Positive Outcomes “The people that are in compliance schedule them back for an hour con- Patient response to the FirstLine pro- and stay with the program do amazsultation with my lifestyle educator, gram is generally positive, Wilson says, ingly,” Wilson says. “They typically are usually the following week. They read and patients are typically very compli- able to get off of their medications. their folder and fill out a health ques- ant with the system. “I think it is much Their body composition improves drationnaire, and then come back in and better than medication compliance,” he matically. Their fat mass comes down, meet with the lifestyle educator. says. “It’s certainly leaps and bounds their lean body weight increases. We “The patients’ intake involves above their compliance with what we don’t put a lot of emphasis on the reviewing my notes and what my rec- used to do, which was to talk to them weight because people’s weight will ommendations were and then looking for five minutes about eating healthier often stay the same, but their body over their health history questionnaire, and give them a handout of recom- composition is still changing.” which gives them a score in several mended foods. I think it’s also much This is a marked improvement over organ systems,” Wilson says. “That more effective than sending them to a the results seen in traditional managescore might be able to show that there diabetic teaching program. With a lot ment of patients with chronic illness, is some inflammation in certain parts of the diabetic teaching that I’ve expe- Wilson says. “It was essentially nonof the body. We integrate existent to see people come all those data and calcuoff medications before late a basal metabolic adopting this system,” he “Because I’m involved in every visit, rate, which helps us figsays. “One of the motivations we are able to bill an office visit code, ure out what the patient’s for adopting this program so the visit will be covered by calorie requirement realwas seeing the number of ly is for their healthy drugs I was having to put patients’ insurance,” Wilson says. weight. Based on that we people on and the number of structure a meal plan unknown interactions that that specifies how much the patient rienced, when I looked at the diets they were undoubtedly happening and how should eat from each food group. It’s a recommend, they are still very high in poorly these people felt and how dismodified low-glycemic Mediterranean carbohydrates and sugars. The calorie couraged they were. diet, so the hardest part is getting most count is probably the same, but what “Now I’m prescribing considerably people to minimize the amount of they’re using just doesn’t really fit the fewer drugs than I was before,” he says. grains they consume. We often offer recommendations I want to give. That’s “And I’m taking people off their medthem medical foods to go along with why I stopped using diabetic teaching, ications or getting them onto lower the diet because the evidence shows except maybe to help the patients learn doses. People are starting to tell me that they will jumpstart the metabolic about what the complications of dia- they feel better than they’ve felt in all changes that need to happen to turn betes are or how to use a glucometer. I their lives. They have forgotten what it Continued on page 12

LIFESTYLE EDUCATOR HELPS PRACTICE ADDRESS CHRONIC ILLNESS WHILE BILLING FOR OFFICE VISITS o incorporate FirstLine Therapy from San Clemente, Calif.based Metagenics into his solo practice in Daly City, Calif., once he had received his own certification in the program, John Wilson, MD, hired a lifestyle educator. The educator is not an RN or MD, Wilson says. “She’s not a licensed provider,” he says. “She has a degree in nutrition education from a local nutrition college. Then she took the FirstLine Therapy certification course as well. “I make it clear to both the patient and the lifestyle educator that the educator is not diagnosing anything,” he says. “She’s

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not giving anyone any medical advice. She is just relaying information and educating patients based on protocols and recommendations that I have made as a physician. I’m the one who decides when the patients need what labs. The lifestyle educator may suggest some products, but I’ll give the yes or no, or agree or disagree with those things.” As a result, and because each office visit starts with a brief consultation with Wilson himself, his practice is able to bill an office visit to patients’ insurance each time they come in. —RD

Practice Options/November 2011 11


DISEASE MANAGEMENT Continued from page 11

really feels like to feel truly healthy, to Increased Revenue educator and my other overhead, with feel more energetic. One of the more Getting involved in the FirstLine the reimbursements I get from the rewarding things that I’ve done in Therapy program was easy and inex- office visits, since I don’t have to spend medicine is to see these changes with- pensive, Wilson says. There is very lit- a full 30 minutes or an hour with each out my having to prescribe patients any tle needed in the way of specialized patient—I’m spending five minutes pills.” equipment, and the medical food, if a with the LifeStyle patients—it all adds Wilson views the program as reduc- practice opts to carry it, is sold to up. It frees up a lot of my time, and yet ing the overall cost of care for patients patients. we’re still getting an office visit. Then with chronic illness. “I have no doubt it “There is very little up-front cost you can also add in the medical foods has dramatically brought down the except for the BIA machine,” Wilson we sell to the patients and the profit cost of care,” he says. “Lifestyle change says. “Then there is the expense of hir- that comes from that. is the first-line recommendation for ing the lifestyle educator and paying “The system really could help care in all of these chronic disease him or her to go through the certifica- generate new patients, if I put it out states. When lifestyle there as a marketing tool,” changes fail to help the he says. “What I’ve seen is patient, then you move the spouse will be doing “The people that are in compliance and onto the drugs. But lifestyle the program and starting stay with the program do amazingly. change is always sort of an to get good results and They typically are able to get off of their then the partner wants to aside, because it’s always assumed that patients’ come in and start learning medications,” says Wilson. lifestyles won’t change. how to do this, but Most doctors just move their primary doctor is right onto the drugs after they tell the tion program. Once you are up and someone else. On several occasions patients once to eat better and exercise. running with the program, the prod- I’ve said to someone that I’d see them You do get an increase in costs at first ucts pay for themselves instantly. in consultation and just do the when you have a few more frequent “I pay my lifestyle educator an lifestyle counseling. And I think I office visits, but that’s only over the hourly rate,” he continues. “Because could do a talk in grand rounds and course of a three- to four-month pro- I’m involved in every visit, we are able easily convince other doctors that this gram to get people established. Then to bill an office visit code, so the visit would be beneficial to their patients. I they’re pretty much on a maintenance will be covered by patients’ insurance. think they would be intrigued by it. The patient only has to pay their co- And I think a doctor could easily open regimen, and they’re getting no more office visits than they would have oth- pay or any deductible, like they would a practice and do this system exclusiveerwise for routine follow-up. An office for any other office visit. ly, and there would be an abundance of visit increase is nothing compared to “It definitely has increased my prac- patients.”■ the cost of medication over the rest of a tice’s revenue,” Wilson says. “Between —Reported and written by Editor Rev DiCerto patient’s life.” the amount I need to pay my lifestyle

SALE OF MEDICAL FOOD INCREASES PRACTICE REVENUE, JUMPSTARTS PATIENTS’ METABOLISMS n his Daly City, Calif.-based solo practice where he offers FirstLine Therapy counseling to patients with diabetes and other chronic illnesses, John Wilson, MD, also supplies medical foods from Metagenics, located in San Clemente, Calif. The foods are intended to help jumpstart the metabolic changes that the lifestyle modification encourages, Wilson says. “It’s a powder that you would mix,” Wilson says. “We’re trying to get more protein into the patient’s diet. They have it twice a day as a meal supplement; it’s not used as a meal replacement.”

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12 Practice Options/November 2011

In addition to providing the patients with a convenient source of a product that helps them to more quickly improve their blood sugar levels or even stop needing medication, the sale of the medical food has provided Wilson’s practice with a new stream of revenue. “We stock it right in the office,” he continues. “We have all the different flavors and brands and types right there. The patients can purchase it directly from our office or online, and we will monitor them and make recommendations while they use the medical food.” —RD


HEALTH REFORM

IOM Recommends Criteria, Methods to Develop Essential Health Benefits Package

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n Institute of Medicine (IOM; including medical effectiveness, safety, Updating the Package http://iom.edu) report released and relative value compared with alter- HHS will need to amend the package in October provides the U.S. native options, and evaluate whether over time to keep pace with advances in Department of Health and Human the package as a whole protects the clinical technologies, changes in patient Services (HHS) with a set of criteria and most vulnerable individuals, promotes populations, and other national trends. methods to develop a package of essenservices that have proved effective, and The list of essential health benefits can tial health benefits that will cover many addresses the medical concerns of become more detailed and promote health care needs, promote medically greatest importance to the public, the greater value over time, the report effective services, and be affordable to report says. Benefits that have been notes. The premium target should be purchasers. HHS decisions about which mandated for insurance coverage by updated periodically to reflect medical benefits warrant designation as essenindividual states should be subject to inflation, and changes in the benefits tial should be made in a transparent the same review and criteria. Products package should be cost-neutral against manner, added the committee that and services that do not meet the crite- this revised target. wrote the report. HHS officials should glean input ria should not be included. Certain insurance plans, including Because the package must be afford- from a National Benefits Advisory those participating in the state-based able to the small firms and individuals Council, a new independent entity rechealth insurance exchanges to be estabwho will be the principal customers for ommended by the committee, the lished under the Patient Protection and the exchanges, its comprehensiveness report says. The council should have the Affordable Care Act (ACA), must cover should be balanced with its potential necessary expertise to advise HHS on a package of preventive, diagnostic, and cost, the committee concluded. The research necessary to evaluate benefits’ therapeutic services and effectiveness and value, changes products in areas that have to the premium target, and bene[T]he essential health benefits should been defined as essential by fit administration and design reflect the scope of benefits covered HHS. The package will issues. Members should repreestablish the minimum by a typical employer plan and include sent a range of disciplines and benefits that plans must perspectives, including those of 10 specific categories. cover. The report neither employers and consumers. recommends a list of essenHHS should also develop a strategy to cut the health care tial benefits nor comments on whether any particular service report recommends that HHS deter- spending growth rate, the committee should be included or excluded. mine what the national average premi- urged. um of typical small employer plans The essential health benefits package Establishing Essential Benefits would be in 2014 and ensure that the will be available through a variety of The ACA stipulates that the essential package’s scope of benefits does not health insurance policies with an array health benefits should reflect the scope exceed this amount. of choices in premiums, deductibles, of benefits covered by a typical employHHS officials would benefit from and provider networks. Services or er plan and include 10 specific categathering input on the health priorities products excluded from the package gories. To refine the package, HHS staff of the public from a series of structured could be added to plans at an insurer’s should determine what benefits are typ- deliberative sessions held nationwide. discretion, but consumers may have to ical of small employer plans, because These sessions would engage small- bear additional costs for these extra small employers will be among the business owners, uninsured people, and benefits as they do now. main customers for policies in the state- others in weighing benefits and costs The study was sponsored by HHS. based exchanges, the report says. HHS and considering trade-offs, and the The full report is available at officials should gauge potential services process would promote transparency, www.nap.edu/catalog.php?record_id=1 and products against a set of criteria, the report says. 3234. ■

Practice Options/November 2011 13


PRACTICE MANAGEMENT NEWS

NCQA Program to Emphasize Patient in the PCMH Model

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he new Distinction in Patient Experience Reporting program from the National Committee for Quality Assurance (NCQA; www.ncqa.org) gives clinician practices recognized by NCQA as patient-centered medical homes (PCMHs) the option of earning additional honors for reporting what patients think of the care they receive. Reporting of patient experience helps medical homes remain responsive to patients’ needs. NCQA PCMHs can earn distinction by submitting results of the Consumer

HHS LAUNCHES INITIATIVE

Assessment of Healthcare Providers and Systems (CAHPS) PCMH Survey to NCQA twice a year using certified survey vendors, starting in April 2012. The CAHPS PCMH survey assesses several domains of care: access, information, communication, coordination of care, comprehensiveness, self-management support and shared decisionmaking. The survey is an important step in measuring and improving how a practice delivers care. It also assesses whether the practice is meeting goals of the PCMH.

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Practices that earn distinction through the program will be listed in various directories for their achievement. They will also receive credit toward one component of NCQA’s latest PCMH recognition program, PCMH 2011. NCQA will use all submitted information to build a benchmarking database that will enable comparisons across practices. Interested practices can obtain an online application for CAHPS PCMH at (www.ncqa.org/Communications/ Publications/index.htm).

STRENGTHEN PRIMARY CARE

he U.S. Department of Health and Human Services (HHS) in September launched a new initiative made possible by the Affordable Care Act to help primary care practices deliver higher quality, more coordinated and patient-centered care. Under the new initiative, Medicare will work with commercial and state health insurance plans to offer additional support to primary care doctors who better coordinate care for their patients. This collaboration, known as the Comprehensive Primary Care initiative, is modeled after innovative practices developed by large employers and leading private health insurers in the private sector. Primary care practices that choose to participate in this initia-

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tive will be given support to better coordinate primary care for their Medicare patients. The support will help doctors help patients with serious or chronic diseases follow personalized care plans; give patients 24-hour access to care and health information; deliver preventive care; engage patients and their families in their own care; and work with other doctors, including specialists, to provide better coordinated care. CMS will pay primary care practices a monthly fee for these activities in addition to the usual Medicare fees that these practices would receive. For more information, see the Comprehensive Primary Care initiative Web site at http://innovations.cms.gov/ areas-of-focus/seamless-and-coordinated-care-models/cpci/.

SURVEY: MEDICAL PRACTICES CUT OPERATING EXPENDITURES 2.2.% edical practices cut general operating expenditures 2.2% in 2010, according to the Englewood, Colo.-based Medical Group Management Association’s (MGMA) Cost Survey for Multispecialty Practices: 2011 Report Based on 2010 Data. However, since 2001, general operating costs have increased by 52.64% to $252,629, exceeding revenue gains during that timeframe, the survey says. Total medical revenue in multispecialty practices not owned by hospitals or integrated delivery systems (IDSs) increased 45.87% since 2001 and 8.5% since 2009, likely as a result of closer monitoring of operating expenses. Spending on furniture and equipment decreased 23.37% since 2010, and drug supply costs decreased

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14 Practice Options/November 2011

IN

2010

8.52%. Medical practices reported rising expenditures for total support staff (increased 4.78% since 2010) and medical and surgical supplies (increased 7.43% since 2010), the survey indicates. MGMA’s Cost Survey includes data from more than 44,000 providers and 1,994 groups. The report includes practice data by full-time-equivalent physician, provider, total or work RVUs, patients and square footage, as well as complete data on staffing ratios and costs. The survey also includes an IDS section that highlights staffing, cost and productivity data points for IDS-owned multispecialty practices. Copies of the survey can be purchased through the MGMA Web site, www.mgma.com.


MORE PATIENTS USING AFFORDABLE CARE ACT FREE PREVENTIVE BENEFITS

Affordable Care Act Initiative Helps Target Chronic Disease

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he U.S. Department of Health and Human Services (HHS) announced in September 61 grants to states and communities with over 120 million residents to fight chronic disease, the leading cause of death in Americans. Created by the Affordable Care Act, Community Transformation Grants help communities tackle the root causes of chronic disease, including smoking, poor diet and lack of physical activity. The funds total more than $103 million. Chronic diseases are responsible for 75% of health care costs in the United States. The Community Transformation Grants will support prevention programs proven to make a positive impact on health. All grantees will work to address the priority areas of tobacco-free living; active living and healthy eating; and quality clinical and other preventive services, specifically prevention and control of high blood pressure and

high cholesterol. Grantees may also focus on creating healthy and safe environments, and will have an additional focus on reducing health disparities. Thirty-five grantees will implement proven interventions to help improve health and wellness with funding amounts ranging from $500,000 to $10 million, depending on population size and project scope. Twenty-six grantees will work to build capacity by laying a foundation for sustainable community prevention efforts with funding amounts ranging from $147,000 to $500,000, depending on population size and project scope. Awards are distributed among state and local government agencies, tribes and territories, and non-profit organizations. Awards went to grantees in 36 states, including seven tribal organizations and one territory. These grants are expected to run for five years. For more information, visit www. cdc.gov/communitytransformation.

AAFP FOUNDATION LAUNCHES PROGRAM TO AID NEW FREE CLINICS he Leawood, Kan.- based American Academy of Family Physicians Foundation (AAFP Foundation; www.aafpfounda tion.org) in October announced the launch of a program to support the start-up efforts of new, free health clinics nationwide. Family Medicine Cares will provide grant money to help eligible clinics purchase tangible items such as exam tables, computers and medical equipment. It will also provide opportunities for retired and active family physicians, residents and medical students to volunteer at clinics that serve a large population of uninsured patients. “Over the past year, free clinics in the United States have seen

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he Centers for Medicare & Medicaid Services (CMS) reported in October that nearly 20.5 million people with Medicare reviewed their health status at a free Annual Wellness Visit or received other preventive services with no deductible or cost sharing this year. In addition, nearly 1.8 million people with Medicare received discounts on brandname drugs in the Medicare Part D coverage gap, also known as the “donut hole,” between January and August of this year. The total value of discounts to Medicare patients in the donut hole is nearly $1 billion through August of this year, with an average savings of $530 per beneficiary. Free preventive services available to patients with Medicare include mammograms and cervical cancer screenings; Annual Wellness Visits; cholesterol and other cardiovascular screenings; and colorectal and prostate cancer screenings. The Web-based Medicare Plan Finder (www.medicare. gov/find-a-plan/) can help beneficiaries, their families, other caregivers, and senior program advocates look at all local drug and health plan options that are available for the 2012 benefit year.

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a dramatic rise in patient visits, by as much as 50%,” said Richard G. Roberts, MD, JD, president of the AAFP Foundation. “Most of these people (83%) live in working households. Even with health care reform, there will always be an underserved population.” All clinics will be staffed by volunteer physicians, other health care professionals, and members of the community. All services will be free of charge, supported through grants, donations and fundraising events. Family Medicine Cares aims to support the opening of several new free health clinics annually. For a full list of grant application guidelines, visit www.aafpfoundation.org/ familymedicinecares.

Practice Options/November 2011 15


DIABETES PRACTICE

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November 2011

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Diabetes Practice Options, November 2011