Healthcare Financial News

In a letter to President Obama today, six healthcare groups outlined specific initiatives they said would fulfill the pledge they made a month ago to help “achieve your Administration’s goal of decreasing by 1.5 percentage points the annual health care spending growth rate—saving $2 trillion or more.” The six organizations—the American Hospital Association, American Medical Association, America’s Health Insurance Plans, Advanced Medical Technology Association, Pharmaceutical Research and Manufacturers of America, and Service Employees International Union—said that their proposed system-wide cost reductions, which “will require collaboration and good public policy,” have the potential to save $150 to $180 billion on utilization of care; $350 to $850 billion on chronic care; and $500 to $700 billion on administrative simplification and cost of doing business.

Each group presented its own initiatives to contribute to the overall cost savings. The American Hospital Association said it was committed to designing and implementing a national “Hospitals in Pursuit of Excellence” campaign, which would focus on hospital performance improvements that “have meaningful quality improvement and associated cost savings.” Immediate cost savings could be achieved, according to the AHA, by promulgating best practices that would reduce surgical infections and complications, central line-associated blood stream infections, ventilator-associated pneumonia, catheter-associated urinary tract infections, adverse drug events, and pressure ulcers. The AHA also listed longer-term goals that hospitals would work towards, including “improving care coordination, implementing health information technology, promoting efficiency resource utilization, preventing patient falls, improving perinatal care, and reducing supply costs.”

The AHA said it would work with “other stakeholders to achieve a more efficient, effective and coordinated health care system. The future vision of such a system includes simplified and standardized public and commercial insurance processing systems, reducing the need to practice defensive medicine and enhancing the ability of practitioners and providers to integrate clinically to improve quality of care.”

Over the weekend, Senator Edward Kennedy, Chairman of the Health, Education, Labor & Pensions Committee, and Senator Max Baucus, Chairman of the Finance Committee, affirmed that they are trying to find common ground on health reform legislation, despite news reports that state they are divided on whether to include a public health plan option in the bill. The two committees are working on separate bills that will be merged. “We have worked together closely over many months and will continue to do so,” the senators said in a statement. “We intend to ensure that our committees report similar and complementary legislation that can be quickly merged into one bill for consideration on the Senate floor before the August recess."

The New York Times reported last week that Kennedy wants a public health plan that would resemble Medicare and compete with private insurers. Under Kennedy’s proposal, the public plan would pay about 10 percent more than Medicare but less than private insurers. Baucus, however, favors a public plan only if private insurers are unwilling to make the concessions that would make insurance more affordable. Republicans are opposed to a public plan, which they say would unfairly compete with private insurers.

Consumer advocacy group Public Citizen is calling on HHS Secretary Kathleen Sebelius to address concerns that hospitals are not submitting reports to the National Practitioner Data Bank (NPDB) when they revoke or restrict physicians' admitting privileges. In its report, Hospitals Drop the Ball on Physician Oversight, and letter to Sebelius, the advocacy group charges that nearly half of hospitals have never filed a NPDB report in 17 years, despite estimates by HHS that 5,000 hospital clinical privilege reports would be submitted to the NPDB each year. The average number of hospital reports per year has been 650.

The report claims that the lack of reporting by hospitals is due to lax hospital peer review and the use of loopholes to avoid the reporting requirement. Public Citizen is asking Sebelius to follow through on recommendations made by the Office of Inspector General in 1996 to stop NPDB under-reporting, such as fining hospitals each time they fail to make a report and making NPDB reporting a condition of participating in Medicare.