Home healthcare is a growing need for many Americans. But is it delivering on its promises? (Photo: MyFuture/Flickr)

Americans are growing older—and their caretakers need to decide the best and most cost effective way to care for them.

Since 2011, nearly 77 million baby boomers have become eligible for Medicare. For the elderly and those suffering from chronic diseases, home healthcare (HHC) is a convenient and cost-effective solution that avoids the necessity of receiving care through hospitals and nursing homes.

HHC meets an important demand in the healthcare system. Experts have found that close to 90 percent of Americans wish to spend their final time at home. But how does the care HHC providers deliver compare to that of larger health institutions?

In collaboration with investigators at the University of California at Irvine, Dr. Jacqueline Zinn, professor in the Fox School’s Department of Risk, Insurance and Healthcare Management, has received a five-year grant from the National Institute of Health to investigate the cost effectiveness and quality of care provided by home healthcare agencies.

Over the last decade, the home healthcare field has seen dramatic increases in patients, care providers, and spending. The New York Times reported that individual states spend close to $200 billion of their own funds on Medicaid, making it the second biggest item within their budgets.

As projections continue to rise and healthcare technology advances, patients should be aware of their care options.

“What we don’t know is whether or not the technologies that lead to additional growth impact the quality of care delivered,” said Zinn. “In other words, do larger facilities have better quality associated with growth? What is the optimal [home healthcare] agency size with respect to cost and quality? These are the questions we hope to answer.”

Home healthcare not only includes rehabilitative care after surgery, but hospice care and palliative care, which is dedicated to relieving people’s physical and emotional symptoms after facing life-threatening illnesses.

“Healthcare is on track to become 20 percent of the GDP,” said Zinn. “That means one in every five dollars generated by the U.S. economy will be in the healthcare sector.”

Alongside her fellow researchers at the UC Irvine, Zinn aims to discover valuable insights for patients, government, and health institutions, and home healthcare agencies alike by learning more about this under-researched field.

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Healthcare in this United States is a lightning rod for debate. As Congress grapples with the future of the Affordable Care Act, the American people face uncertainty in medical care and costs.

To improve the efficiency, quality, and cost-effectiveness for patient care, hospitals have increasingly turned digital, using Electronic Medical Record (EMR) systems to store and share patient’s medical history. However, as the use of EMR systems increased, so did reported healthcare costs.

Since the adoption of the physician coding systems used to store and update EMRs in 2009, Medicare has experienced an estimated $380 million increase in reimbursements per year. Medicare accused hospitals of “upcoding,” or illegally overstating patients’ diagnoses and treatment, in an effort to receive a higher reimbursement. A 2012 study showed that hospitals in Utica, NY, and Nashville, TN, increased its patient reimbursement claims by 43% and 82% respectively after adopting EMR systems.

In response to this drastic surge in reimbursements, the Centers for Medicare and Medicaid Services conducted a pilot program, the Recovery Audit Program, from 2004 to 2010. Researchers at the Fox School partnered with researchers at McGill University to study how this audit program has been able to reduce illegal Medicare reimbursement claims, thus lessening the financial burden on American taxpayers.

Hilal Atasoy

The initial goal of implementing EMRs was to lower costs by reducing medical errors, over-testing, and re-admissions. But the findings of Dr. Kartik K. Ganju of McGill and Drs. Hilal Atasoy and Paul Pavlou of Temple University, confirmed that the adoption of the coding system is associated with an increase in Medicare reimbursements, particularly in the case of for-profit hospitals.

The research found an average of $217,745 in inflated reimbursements to Medicare per hospital per year, and even higher costs (nearly $370,000 in overages) at for-profit hospitals. After finding $693 million in overpayments by Medicare in six pilot states, the audit program was adopted nationwide in 2010.

The researchers looked into this “trillion-dollar conundrum” and found that the audit program successfully combated upcoding by using default templates and by identifying and removing cloned records of old patient that were erroneously copied into a new patient’s medical chart. After the audit became nationwide, the study found that it had corrected up to $2 billion in incorrect claims; yet for-profit hospitals were still reporting high reimbursement fees than their nonprofit counterparts.

The bottom line? While EMRs have enhanced coordination and information sharing, they also make it easier to report expensive and potentially inappropriate healthcare expenses.

As the first successful evaluation of the Recovery Audit Program, the researchers praise the work that has been done, but warn that stronger oversight by the government is still needed to combat ever-increasing costs, especially at for-profit hospitals.

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Molly Belmont

Molly Belmont, a Risk Management and Insurance student from Temple University’s Fox School of Business, has been selected as the winner of the 2016 American Association of Managing General Agents (AAMGA) Student White Paper Research Contest.

A junior, Belmont won the AAMGA competition’s Technology and Wholesaler category for her paper, “Internet of Things Insurance, Opportunities, and Threats.”

In her paper, Belmont focused on three distinct areas – the connected home, the connected car, and the connected self – and discussed benefits and potential flaws in the collection of data through the Internet of Things IoT.

“While these devices can help insurance companies price better premiums and lower risk, and can also better educate the consumer and help them identify exactly what they’re paying for, there is a cyber risk involved with these devices that most companies didn’t necessarily consider,” said Belmont, a native of Malvern, Pa. “These systems can be hacked and create unforeseen dangers.”

Belmont said the paper was the culmination of more than one month’s work, during which time she utilized more than 20 sources. She said it was the first writing competition in which she’s taken the top prize. Belmont credited Fox School Assistant Professor Storm Wilkins with the encouragement to enter the competition.

For her winning entry, Belmont will receive a scholarship totaling $1,000; an all-expenses-paid trip and registration for the 90th AAMGA Annual Meeting, to be held May 22-25 at the JW Marriott Desert Ridge Resort in Scottsdale, Ariz.; an opportunity to shadow an AAMGA member during his or her meetings at the conference; and publication of her paper in the May issue of Wholesale Insurance News magazine, which is distributed to more than 1.4 million insurance professionals in more than 40 countries globally.

“I’ve been looking into the schedule of events and the networking opportunities available at the conference,” said Belmont, who this summer will serve as a benefits intern in the Philadelphia office of Arthur J. Gallagher & Co. “I wasn’t expecting to win, so it’s a big thrill.”

Read about the 2015 research contest winner, Hayley Leather.

Pharmaceutical companies would improve sales revenue by investing in commercial operations that promote business innovation, employee engagement, organization alignment, and ensure a reasonable ratio between district sales managers and frontline sales representatives, according to Fox School of Business research.

The study was commissioned by TGaS Advisors, a benchmarking and advisory services firm, and division of KnowledgePoint360®, a global leader in communications, information and workflow services to healthcare professionals and the pharmaceutical and biotechnology industries.

“We focused on factors likely to impact pharmaceutical sales because data for this area are more robust, but the value of investments in sales operations should be read as a proxy for a broad range of commercial operation functions,” said George Chressanthis, the professor of healthcare management and marketing at the Fox School of Business who led the study team with Eric Eisenstein, assistant professor of marketing, and Fox PhD student Patrick Barbro.

According to Chressanthis, this is the first such independent research study on the effects of qualitative versus quantitative measures of commercial operation functions on business performance. Internally reported data from 26 pharmaceutical companies were analyzed for the period 2005-2011 and was complemented with qualitative survey data on commercial operations’ cultural attributes assessed by strategic account executives at TGaS Advisors.

The research team was given complete access to their database, with all analyses, findings, and recommendations independently developed of TGaS Advisors. All company specific data elements and names in the research were kept confidential, in keeping with contractual obligations, but did not affect the course the analysis.

The research showed that three factors within a company’s commercial operations organization are particularly important in determining U.S. business performance:

  • Commercial operations’ cultural attributes, specifically innovativeness and responsiveness, which drive employee engagement and organizational alignment, are critical. These attributes are most powerful in affecting sales when working synergistically and in concert with quantitative investments in commercial operations support.
  • Company scale and spending to support sales professionals that allow for more products to sell and leverage specialized commercial operations functional support for sales representatives to be more effective in their role.
  • The number of sales representatives whom district sales managers supervise has a direct bearing on their ability to provide necessary levels of sales force effectiveness activities such as coaching, mentoring, on-the-job training, and managerial support to representatives, which in turn has a quantifiable impact on business performance.

The findings suggest that executives can significantly improve commercial performance by investing resources to:

  • Create stronger alignment between functions and foster a culture of commercial innovation, organizational alignment, agility, and urgency. Quantitative investments in commercial operations will yield sub-optimal returns without the right structure of cultural attributes to support these business activities.
  • Support improvements in sales professionals (i.e., through information, systems, business processes, training, etc.).
  • Ensure an optimal number of sales representatives reporting to each first-line sales manager.

The Fox School research team has presented study findings at the following conferences: Pharmaceutical Management Science Association Annual Conference in May 2013 (Bonita Springs, Fla.), International Health Economics Association 9th World Congress in July 2013 (Sydney, Australia), and the American Marketing Association Summer Marketing Educators’ Conference in August 2013 (Boston).

Further insights from the study can be found by reading, “What Aspects of Commercial Operations Impact Pharmaceutical Company Business Performance?” and TGaS Advisors’ “Reflections on a Research Study Conducted by the Temple University Fox School of Business,” both available at www.tgas.com.