HMT: Brainlike computers, new medical billing system, 2014 hospital challenges, and more
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                                            Management Technology News
December 30, 2013

In this issue:

Brainlike computers, learning from experience

Rollout of new medical billing system has some on edge

10 challenges and opportunities for hospitals in 2014

Federal health care sign-ups pass 1 million mark

Brainlike computers, learning from experience

Computers have entered the age when they are able to learn from their own mistakes, a development that is about to turn the digital world on its head.

The first commercial version of the new kind of computer chip is scheduled to be released in 2014. Not only can it automate tasks that now require painstaking programming — for example, moving a robot’s arm smoothly and efficiently — but it can also sidestep and even tolerate errors, potentially making the term “computer crash” obsolete.

The new computing approach, already in use by some large technology companies, is based on the biological nervous system, specifically on how neurons react to stimuli and connect with other neurons to interpret information. It allows computers to absorb new information while carrying out a task, and adjust what they do based on the changing signals.

In coming years, the approach will make possible a new generation of artificial intelligence systems that will perform some functions that humans do with ease: see, speak, listen, navigate, manipulate and control. That can hold enormous consequences for tasks like facial and speech recognition, navigation and planning, which are still in elementary stages and rely heavily on human programming.

Designers say the computing style can clear the way for robots that can safely walk and drive in the physical world, though a thinking or conscious computer, a staple of science fiction, is still far off on the digital horizon.

Read the full New York Times article

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Rollout of new medical billing system has some on edge

Know someone who drowned from jumping off burning water skis? Well, there’s a new medical billing code for that.

Been injured in a spacecraft? There’s a new code for that, too.

Roughed up by a killer whale? It’s on the list.

Starting next year, a transformation is coming to the arcane world of medical billing. Overnight, virtually the entire health care system — Medicare, Medicaid, private insurers, hospitals, doctors, and various middlemen — will switch to a new set of computerized codes used for reporting what ailments patients have and how much they and their insurers should pay for a specific treatment.

The changes are unrelated to the Obama administration’s new health care law. But given the lurching start of the federal health insurance website,, some doctors and health care information technology specialists fear major disruptions in health care delivery if the new coding system — also heavily computer-reliant — is not put in place properly. They are pushing for a delay of the scheduled start date of Oct. 1 — or at least more testing beforehand.

“If you don’t code properly, you don’t get paid,” said Dr. W. Jeff Terry, a urologist in Mobile, Ala., who is one of those who thinks staffs and computer systems, particularly in small medical practices, will not be ready in time. “It’s going to put a lot of doctors out of business.”

The new set of codes, known as ICD-10, allows for much greater detail than the existing set, ICD-9, in describing illnesses, injuries, and treatment procedures. That could allow for improved tracking of public health threats and trends and better analysis of the effectiveness of various treatments.

Officials at the Centers for Medicare and Medicaid Services declined to be interviewed about the new codes. But a spokeswoman said the agency is “committed to implementing ICD-10 on Oct. 1, 2014, and that will not change.”

In a letter in November, Kathleen Sebelius, the secretary of health and human services, told Senator Jeff Sessions, Republican of Alabama, that Medicare and Medicaid officials were working diligently to help doctors get ready.

“ICD-10 is foundational for building a modernized health care system that will facilitate broader access to high quality care,” she wrote.

Still, the troubles with have given new ammunition to those urging a go-slow approach on ICD-10 and have made it harder for the government to stand behind assurances that the transition will go smoothly.

“Failure to appropriately test ICD-10 could result in operational problems similar to what the Department experienced with the rollout of,” the Medical Group Management Organization, which represents the business managers of medical practices, said in a letter this month to Sebelius.

Read the full Boston Globe article

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10 Challenges and Opportunities for Hospitals in 2014

It's not hard to develop a Chicken Little worldview if you work in healthcare, particularly if you're sitting in the hospital C-suite. If you don't catch yourself, it's easy to think the sky is falling, piece by piece, one day after the next.

The challenges facing hospitals are daunting, surely. But real leaders know what good they get from doomed thinking: none. It's an exercise in futility, and real leaders have never cared for pointlessness.

For this, we're glad. As experts here can attest to, there are some real opportunities behind each of the challenges looking hospital and health system leaders squarely in the eye in 2014.

1. Health insurance exchanges. Hospitals face three challenges regarding the health insurance exchanges. One is lower reimbursement under the exchanges than they would receive from employer-sponsored commercial plans.

Christopher Kerns, managing director with The Advisory Board Company in Washington, D.C., said he's heard reimbursement rates under the typical exchange plan are a single-digit point above Medicare reimbursement rates, which generally cover 85 to 95 percent of fully allocated costs.

The second challenge lies in signing patients up for the exchange. "Hospitals need to make sure there is maximum awareness to ensure their patient base is insured," says Mr. Kerns.

The third challenge for hospitals will be dealing with the effects of high-deductible plans, which make up a majority of those offered on the exchanges. "This places a huge collection burden on hospitals," says Mr. Kerns. Historically, hospitals' recovery rate for collections has ranged from 18 to 30 percent, meaning organizations have to significantly upgrade their collection capabilities.

Although hospitals will have to make some changes to their collection practices, they have a big opportunity this year to reduce their overall bad debt under the exchanges, since most bad debt stems from uninsured patients. If high-cost patients gain coverage under the exchanges, hospitals can reduce one of the most extractable expense categories, says Mr. Kerns. As he points out: Exchanges were supposed to be one component of the healthcare reform law to benefit hospitals, and there is still a chance to realize that.

2. ICD-10. ICD-10 will go live Oct. 1, 2014, a day some hospital leaders are more cognizant of, while others have pushed it to the back of their minds. The amount of preparation hospitals have devoted to ICD-10 varies greatly from institution to institution. Some have been working diligently for the past two to three years and have made great progress. Other organizations are incredibly far behind. The latter problem isn't limited to small practices or 90-bed hospitals, says Ed Hock, senior director of The Advisory Board Co. "We talked to 10 health systems that, even as of a couple weeks ago, have done next to nothing," he says.

Why are some health systems so behind? "Every reason from they just went through a merger to they just implemented an electronic medical record to they are just trying to survive," says Mr. Hock. Hospitals that haven't been taking ICD-10 seriously make up a sliver of the pie, he says. Most have had a hard time preparing for it simply because their resources and time are devoted to meeting other high-priority demands.

"This is a really important year," says Mr. Hock, but the transition will also be taxing as staff and physicians are asked to learn new systems, terminology and work patterns. There is a silver lining, however. Organizations that have properly prepared for ICD-10 have an opportunity to improve numerous different processes, from coding to the way they engage with physicians to centralization and implementing new technology.

Read the full Becker's Hospital Review article

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Federal health care sign-ups pass 1 million mark

The government's rehabilitated health insurance website has seen a December surge in customer sign-ups, pushing enrollment past the 1 million mark, the Obama administration says.

Combined with numbers for state-run markets, that should put total enrollment in the new private insurance plans under President Barack Obama's health law at about 2 million people through the end of the year, independent experts said.

That would be about two-thirds of the administration's original goal of signing up 3.3 million by Dec. 31, a significant improvement given the technical problems that crippled the federal market during much of the fall. The overall goal remains to enroll 7 million people by March 31.

"It looks like current enrollment is around 2 million despite all the issues," said Dan Mendelson, CEO of Avalere Health, a market analysis firm. "It was a very impressive showing for December."

The administration said that of the more than 1.1 million people now enrolled in the federal insurance exchange, nearly 1 million signed up in December. The majority came days before a pre-Christmas deadline for coverage to start in January. Compare that with a paltry 27,000 in October, the federal website's first, error-prone month.

"We experienced a welcome surge in enrollment as millions of Americans seek access to affordable health care coverage," Marilyn Tavenner, the head of the Centers for Medicare and Medicaid Services, said in a blog post announcing the figures.

The numbers don't represent a full accounting for the country.

The federal website serves 36 states. Yet to be reported are December results from the 14 states running their own sites. Overall, states have been signing up more people than the federal government. But most of that has come from high performers such as California, New York, Washington, Kentucky and Connecticut. Some states continue to struggle.

Still, the end-of-year spike suggests that the federal insurance marketplace is starting to pull its weight. The windfall comes at a critical moment for Obama's sweeping health care law, which becomes "real" for many Americans on Jan. 1 as coverage through the insurance exchanges and key patient protections kick in.

Read the full Denver Post article

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Continuing Education

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January 2014
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