HealthBiz: New law brings opportunities

By ELLEN BECK, United Press International  |  Dec. 16, 2003 at 3:59 PM
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WASHINGTON, Dec. 16 (UPI) -- A new weekly series by UPI covering important developments in the U.S. healthcare industry.


WASHINGTON, Dec. 16 (UPI) -- The Medicare prescription drug law is a boon to monitoring device companies that can combine technology with patient education and self care.

The bill, which was signed into law Dec. 8, contains an overlooked provision that, for the first time, allows Medicare to begin paying for long-term programs of disease management -- those that can help healthcare providers and beneficiaries control chronic conditions, such as asthma, diabetes or congestive heart failure.

The goal is to monitor a patient's health at home to prevent complications that would require hospitalizations and other more costly treatments. The idea of reducing costs and providing better quality of life for Medicare beneficiaries has bipartisan support.

The law requires the Department of Health and Human Services to develop and evaluate, on a limited basis, chronic care improvement programs over three years, starting in 2004. If it works, a broader program would be rolled out in 2007. The law requires the programs to include "monitoring technologies that enable patient guidance through the exchange of pertinent clinical information, such as vital signs, symptomatic information, and health self-assessment."

For companies such as the Health Hero Network, of Mountain View, Calif., which develops technology for chronic care management that combines home health monitoring and patient education, the new law creates a market of 43-million seniors that was not there before. Formerly, such programs basically were considered pilot or demonstration projects because Medicare paid for only a very limited amount and duration of such care.

Steve Brown, HHN's chief executive officer, told United Press International his industry niche drove home the point that it is not only disease management that is important, but also making disease management accountable, so programs are not viewed by politicians as giant black holes, into which healthcare dollars disappear.

"We made the argument that with a technology-based approach you have a lot of data and the data keeps people accountable," he said.

Dr. Molly Coye, CEO of the non-profit Health Technology Center in San Francisco, said in a statement: "The impact of the chronic care provisions quietly included in this bill may be as important to the future of Medicare as the highly publicized drug benefit. Chronic care that incorporates information systems and patient monitoring will improve the quality of care and drive down costs."

Health Hero's Health Buddy is an example of the personal monitoring device. It provides an interface between patients at home and their caregivers but asking patients questions about their health on a daily basis and responding based on their answers.

Brown said the idea behind the technology is it does not require a specialized company to implement it, but rather it is something physician offices and hospitals can easily use.


The good news is healthcare spending by businesses has slowed -- the bad news is it still is growing far faster than growth in the overall economy.

A new study by the Center for Studying Health System Change finds healthcare spending growth for privately insured Americans -- business' costs for providing healthcare benefits -- in the first half of 2003 increased 8.5 percent, down from 10 percent in the second half of 2002. It is the biggest six-month drop since the early 1990s but is tempered by the fact the overall economy only sustained a 2.9 percent growth in per capita gross domestic product during the same time.

The study credits businesses shifting more healthcare costs to employees as co-pays, deductibles or higher premiums for causing the slowdown but co-author Paul Ginsburg of HSC said "few experts expect this tool to substantially lower cost trends over the long term."

Other research has shown employer-sponsored health insurance premium increases reached a 13-year high this year -- at an average 13.9 percent -- so the question is what impact the downtown in spending will have on premium growth next year.

An interesting note is hospital utilization trends and hospital compensation trends are running in opposite directions. A serious shortage of healthcare personnel has boosted compensation pressures on hospital budgets. In contrast, a continued trend toward out-patient services and fewer inpatient hospital days, as well as higher cost sharing, have driven the utilization trend downward.


The Centers for Medicare and Medicaid Services is wasting no time getting potential Medicare discount drug card sponsors up to speed on the program, which begins next April. CMS will hold a teleconference Thursday on implementing the drug card, along with a pre-application conference Thursday and Friday in Baltimore. A National Medicare Prescription Drug Congress is scheduled for next Feb. 25-27, in Washington.


Ellen Beck covers healthcare issues for UPI Science News. E-mail

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