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On Aug. 22, President Bush signed an executive order promoting quality and efficient health care in federal government administered or sponsored health care programs. The federal government expends large sums of money in the health care marketplace through Medicaid, Medicare, veterans’ benefits, Department of Defense, and similar programs. It certainly has a large stake in the health care arena. In February, the White House National Economic Council came out with a lengthy report titled “Reforming Health Care for the 21st Century.” This was a follow up to President’s Bush’s comments in his Jan. 31 State of the Union address. That report included a chart showing how dramatically health care spending in the United States has increased over the past few decades. It was five percent of the country’s gross domestic product (GDP) back in 1960. It has steadily increased to the point that it was 16 percent of GDP in 2004. It is expected to approach 20 percent by 2015. As anyone who has to pay his or her own health insurance premiums knows, in the past decade or so, they have been rising annually at double-digit rates. It is clear to many that this increasing burden is unsustainable in our economy (personally and globally). Increased insurance premiums are challenging for employers and workers. The federal government’s own budgets are severely strained by the increases in public programs like Medicare and Medicaid. It was not that long ago that most employers paid the full health insurance premiums for their employees. Nowadays, workers are being required to pay increasing portions of said premium costs. One thing unique about health care is that substantially more than one-half of health care spending/medical bills are paid by insurance companies, employers or the government. Most Americans do not know, nor do they easily have access to, what the cost of those health care services might be before they decide whether or not and from whom to receive those services. As a matter of fact, most consumers do not really care what such costs are because they believe someone else is paying the bill, not them. They also question what the real cost is anyway since they see that doctors, hospitals and other providers are accepting a relatively small percentage of their total charges as “payment in full” for their services. It is unique. You certainly do not see that in other fields, such as the legal profession, for example. Some believe that an ideal system would allow Americans to choose their health care based upon their own personal preferences and needs. Purchasing decisions would be made by consumers, not by the government, insurers or employers telling them where they have to go. Health insurance would be portable (meaning you would not have to worry about losing the coverage if you moved or changed jobs). Part of making this work would be for information about the price and quality of the health care options being readily available and easily accessible. Think about it. In what other area are people less worried about what it will cost because “someone else is paying the bill.” The expressed purpose of the executive order was to “ensure that health care programs administered or sponsored by the federal government promote quality and efficient delivery of health care through the use of health information technology, transparency regarding health care quality and price, and better incentives for program beneficiaries, enrollees and providers.” A further purpose of this order was to “make relevant information available to those beneficiaries, enrollees and providers in a readily useable manner and in collaboration with similar initiatives in the private sector and nonfederal public sector.” The order also expressly states that “the actions and steps taken by the federal government agencies should not incur additional costs for the federal government.” Change is desired, but at no more money. The fact sheet that accompanied the executive order pointed out how when people buy new cars, they have access to consumer research on safety, reliability, price and performance. Who among us has not checked on the Internet or with other sources before buying an automobile? But do we do that when we select a doctor? Many understandably believe that Americans should have the same expectation when they are ready to purchase health care services. The term “interoperability” is used in the order. It is defined as “the ability to communicate and exchange data accurately, effectively, securely and consistently with different information technology systems, software applications and networks in various settings, and exchange data such that clinical or operational purpose and meaning of the data are preserved and unaltered.” Agencies are expected to comply with the new requirements of this order by Jan. 1, 2007. Health information technology (IT) is a major focus of this. The executive order directs the federal agencies to use improved health IT systems to facilitate the rapid exchange of health information using products that meet recognized interoperability standards. It also dictates that agencies shall require in contracts or agreements with them that health care providers, health plans or health insurance issuers each implement, acquire or upgrade health IT systems utilizing, where available, health IT systems and products that meet recognized interoperability standards. The executive order also calls for the transparency of quality measurements. This is probably as big of an issue as any. Of course, everyone wants good quality. The question will be how it will be measured. In any event, the order states that each agency shall implement programs measuring the quality of services supplied by health care providers to the beneficiaries or enrollees of a federal health care program. It states that each agency shall develop its quality measurements in collaboration with similar initiatives in the private and nonfederal public sectors. This information is intended to be shared with the beneficiaries. An agency will be deemed to have satisfied the requirements of this provision if it participates in the aggregation of claims and other appropriate data for the purposes of quality measurement. Such aggregation shall be based upon standards established by multi-stakeholder entities identified by the secretary of health and human services (presently Michael Leavitt). The transparency in pricing also is an important part of the executive order. It calls for each agency to make available to the beneficiaries or enrollees of federal health care programs (and, at the option of the agency, to the general public) the prices that its health insurance issuers or its health insurance plans pay for procedures provided by doctors, hospitals, and other health care providers. The executive order also calls for each agency to promote the quality and efficiency of care. This would include the development and identification, for beneficiaries, enrollees and providers, of approaches that encourage and facilitate the provision and receipt of high-quality and efficient health care. It expressly talks about the approaches possibly including “pay-for-performance” models of reimbursement consistent with current law. The fact sheet indicated that the measures of quality at the provider and health plan level would be developed from private and government sources and would not involve developing or releasing data at the individual patient level. Various regional stakeholders would be involved in the process. This would include local providers, employers, and health plans and insurers. It is anticipated that consumers would have access to this information from a variety of potential sources, including insurance companies, employers, and Medicare-sponsored Web sites. Interestingly, in mid-September, a bill (the Health Care Price Transparency Act of 2006) was introduced in the U.S. House, with the backing of the American Hospital Association. It would require states to enact laws that require hospitals to disclose to the public their charges and provide access to that information. It would also require insurers to provide a statement of the estimated out-of-pocket costs of an individual for anticipated future health care services. The bill also calls for the Agency for Health Care Research and Quality to conduct a study as to the financial information consumers should have before making their health care decisions. Time will tell if and when this bill or ones like it will become law. However, it is clear that “transparency in health care” is a hot topic in the eyes of many. VASILIOS J. KALOGREDIS is president and founder of Kalogredis Sansweet Dearden & Burke, a health care law firm, and Professional Practice Consulting Inc., a health care consulting firm, in Wayne, Pa. Among his areas of expertise are group practice arrangements, practice sales and mergers, doctor contract drafting and negotiation, tax and retirement planning for physicians, joint ventures, fraud and abuse matters, and evaluation of practice options for physicians. He can be contacted at 800-688-8314 or by email at [email protected].

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