The primary cause of overcrowded emergency departments is not uninsured patients, reports an article in the Los Angeles Times, citing a study published by the American College of Emergency Physicians and conducted by researchers from the Robert Wood Johnson Foundation and the University of California-San Francisco. The study found that uninsured patients made up only 15% of the 45 million patients who went to the emergency department between July 2000 and June 2001. Although only 10% of patients made four or more visits per year to the emergency department, these patients accounted for accounted for 28% of visits. The vast majority of this patient group--84%--had health insurance, and 81% had a regular doctor or clinic. Half were covered by Medicaid and Medicare, and one-third had private coverage. The patients chose the emergency department because they couldn’t get in to see their doctor or get a hospital bed quickly enough.
Although Pennsylvania's public reporting of hospital performance data shows the number of hospital-acquired infections increasing, this rise may be due to better reporting rather than decreasing quality. Pennsylvania also is reporting commercial payment associated with hospital-acquired infection. The latest data released by the Pennsylvania Health Care Cost Containment Council found that hospitals identified 13,711 hospital-acquired infections during the first nine months of 2005, compared to 11,668 for 12 months of 2004. “The increase can be attributed to the fact that Pennsylvania hospitals are getting better at the reporting process and an expansion in surgical site infection data collection requirements,” says PHC4 executive director Marc P. Volavka. (Click here to dowload the report.)
The hospital-acquired infections that occurred during the first nine months of 2005 were associated with an additional 1,456 deaths, 227,000 extra hospital days, and $2.3 billion in additional hospital charges. The average payment of a hospitalization with a hospital-acquired infection was $60,678 in 2004, whereas the average payment for a hospitalization without such an infection was $8,078. “The actual insurance payments are mammoth,” said Volavka.
Late Wednesday, the House Budget Committee voted 22-17--along party lines--to approve a version of the FY07 budget that does not include President Bush’s proposed reduction in the growth of Medicare payments to hospitals and other providers, according to reports from the committee and in USA Today. The budget plan does include a cap on budgets of government agencies. In his opening statement yesterday prior to the vote, committee chairman Rep. Jim Nussle (R-Iowa) emphasized the need to reform mandatory spending programs, such as Medicare, to ensure they continue to serve the people who need them. He characterized the committee's budget recommendations as a “small--but critical--next step.” The committee's plan will be debated by the full House next week. Earlier this month, the Senate Budget Committee eliminated the proposed Medicare cuts from its version of the budget.
With Medicare beneficiaries signing up for prescription drug coverage at a rate of 380,000 per week, it doesn’t appear HHS will have trouble achieving its goal of enrolling 28 million to 30 million in the first year, according to an HHS announcement. In the past month alone, enrollment increased by 25%, and HHS is encouraging more seniors to sign up before the May 15 deadline.
The state with the highest proportion of seniors voluntarily enrolling in Medicare Part D is Delaware, with two-thirds of eligible Medicare beneficiaries signed up, reports the Wilmington News Journal. The state with the lowest proportion of enrollment is Hawaii, with only 9% of seniors participating.
Healthcare organizations that have been able to break down medicine’s hierarchical culture and its punitive approach to errors have made great strides in improving patient safety, according to the study “Stories from the Sharp End: Case Studies in Safety Improvement” published in the March issue of the Milbank Quarterly. The researchers explore the strategies employed by five hospitals and by Kaiser Permanente of California to encourage staff to report errors and near-misses and voice safety concerns. Among the results: Johns Hopkins saved $2 million annually from reduced ICU lengths of stay and prevented eight deaths; Missouri Baptist Medical Center in St. Louis decreased emergency calls for respiratory arrest by 60% and decreased cardiac arrests by 15%; OSF St. Joseph Medical Center in Bloomington, Ill., reported a 91% drop in adverse drug events, and Sentara Norfolk General Hospital reported an 84% reduction in ventilator-associated pneumonia. The authors recommend that purchasers use pay-for-performance incentives to motivate providers to meet safety goals, regulators use state databases to alert providers to safety threats and improvement possibilities, and educators begin changing medical culture by instilling new attitudes about communication, teamwork, and human fallibility.
Medical group practices that readily adopt new ancillary services and technologies and those that have higher ratios of support staff to physicians tend to be more productive and successful than their peers, according to the Medical Group Management Association’s recently released Performance and Practices of Successful Medical Groups: 2005 Report Based on 2004 Data. Total medical revenue after operating cost for multispecialty groups with primary and specialty care was 24.7% higher per FTE physician ($362,6600 versus $273,037) in “better performer” groups than in others. The same was true for many specialty groups. MGMA also found that operating cost per FTE physician in multispecialty groups was 22% higher among better performers.
More than 40% of better performing groups acquired equipment and materials to provide new services, and 32% acquired new information technology or billing systems--strong factors in improving patient satisfaction, practice efficiency, and profitability. Successful practices also more effectively used staff to boost practice efficiency and provider productivity.
Amid concerns about rampant Medicaid fraud and abuse, the U.S. Senate Committee on Homeland Security and Governmental Affairs, Subcommittee on Federal Financial Management, Government Information, and International Security held a hearing on March 28 “to examine current infrastructure for Medicaid integrity” and review oversight for uncovering improper Medicaid spending. CMS and HHS officials testified that the new Medicaid Integrity Program, created with the recent passage of the Deficit Reduction Act of 2005, would allow federal agencies to better support and monitor states’ efforts to police fraud.
Dennis Smith, Director of the Center for Medicaid Services, testified that with the funds appropriated for the Medicaid Integrity Program--$5 million for FY 2006, $50 million for FY 2007 and 2008, and $75 million for each year after--CMS will add 100 FTEs devoted to anti-fraud and abuse operations. The agency currently has 8.1 FTEs dedicated to preventing Medicaid fraud. CMS is now also mandated to review and audit Medicaid providers and will increase its oversight of state anti-fraud initiatives and provide training on best anti-fraud practices to the states.
Daniel Levinson, Inspector General, HHS, said the OIG will continue to make the following three areas its highest investigative priorities: nursing home quality of care, pharmaceutical manufacturer fraud, and drug diversions. As a result of DRA funding, however, the OIG will devote greater resources and a “full time OIG presence” to such programs as the Medi-Medi program, which compares billings by the same providers to identify patterns of fraud, in order to increase the number and quality of cases referred to law enforcement.
CMS has selected sites for six demonstration projects to improve the early detection and treatment of cancer and reduce health disparities for minority Medicare beneficiaries. The four-year demonstration project will benefit 13,000 minority patients with breast, cervical, colorectal, and prostate cancers by helping them schedule appointments for cancer screening and diagnostic testing as well as guide them in adhering to treatment regimens. Assistance with transportation, translation or interpretations, and care coordination may also be provided. “Reducing disparities in cancer screening, diagnosis, and treatment is essential to improving quality of care for people with Medicare, and this demonstration will allow us to determine the effectiveness of the navigator model to achieve this,” says CMS Administrator Mark McClellan.
Despite the conventional wisdom that aging baby boomers justify the sharp increase in U.S. hospital construction, population aging will play a relatively small role in rising demand for inpatient hospital care over the next decade, according to a study by Center for Studying Health System Change. The study estimates that between 2005 and 2015, population aging will increase use of inpatient services by only 0.74% per year--or 7.6% over the entire decade--compared with a projected overall 64.9% increase in inpatient services during the same period.
The researchers claim that an aging population will have a much smaller than expected impact on inpatient utilization because the average age of the U.S. population is projected to increase only from 36.5 to 37.9 years in the next decade--an average annual increase of 0.37%. Also, the consequences of aging vary widely across medical conditions treated in an inpatient setting, with certain cardiovascular and orthopedic procedures expected to increase, for example, while services for OB and mental illnesses will decline. Local population trends and medical technology advances will be far more important in forecasting community needs for additional inpatient hospital capacity than population aging, according to the study.
Although many not-for-profit community hospitals do not currently have strong fundraising programs, they will increasingly rely on philanthropy to augment diminished income from shrinking reimbursement, predicts Moody’s Investor Services. Moody’s issued a special comment (Fundraising at Not-for-Profit Hospitals Largely Untapped but Increasing) on the importance of hospital fundraising as a factor in determining bond ratings, and says its credit assessments consider whether a hospital’s annual unrestricted gifts are predictable enough to support operations with a steady stream of revenue and whether the hospital’s restricted gifts are sufficient to fund capital projects. Moody’s outlined the following hallmarks of successful fundraising programs: Involved board members who can identify potential donors; a large donor base to prevent dependence on a few large donors; the ability to attract major gifts; predictability in giving; marketing strategies that effectively identify and target donors; full- time fundraising staff; and information systems that can track fundraising efforts.
Disclosing physician pay-for-performance incentives to patients did not alter patients’ trust in their primary care physicians, found a study published in Archives of Internal Medicine involving 9,000 patients at two multispecialty groups in Boston and Los Angeles. Researchers sent half the patients a letter from the groups’ chief medical officers explaining that their physicians received a flat salary in addition to financial incentives based on patient load, quality of care, and patient satisfaction. Three months later when the patient were surveyed, those who had received disclosure letters expressed an increased loyalty to their physician group and no lack of trust in their personal physician. According to the study, disclosure of pay-for-performance compensation programs may be one way to solidify relationships between physicians and patients.
The 32 states that provided emergency medical assistance to thousands of Hurricane Katrina refugees received the first payments from the $2 billion Congress designated to cover those medical expenses, HHS announced. While the bulk of the funds will go to state Medicaid programs, several states that took in the largest number of evacuees will receive special grants to reimburse providers who cared for those ineligible for Medicaid but were still unable to pay their medical bills. The remaining funds will be used to cover future costs for the states. In turn, this funding will allow states to claim approximately $4.5 billion in federal matching funds.
Expanding coverage to the uninsured should be Congress’ top priority in the next five years, according to 250 opinion leaders in health policy and innovators in healthcare delivery and finance who were polled for the Commonwealth Fund Health Care Opinion Leaders Survey. Respondents from the provider side and government felt that it was possible to reduce the number of Americans without insurance from 18% to 5% in 10 years. One proposed solution to expand coverage was to allow individuals and small businesses to buy insurance from the Federal Employees Health Benefits program.
The second priority for Congress is to improve the quality and safety of healthcare with a target of increasing the number of people who receive recommended care from one-half to three-fourths. Some respondents felt information technology and provider incentives were the keys to improving care while others focused on the use of evidence-based guidelines. Third on Congress’ list, according to the respondents, was to enact reforms to moderate the rising cost of medical care for the nation, although none were optimistic that the cost of health care as a percentage of GDP will be reduced from where it is now.
CMS has launched the Physician Voluntary Reporting Program to identify how physicians can efficiently collect and report the data that CMS will use in its quality improvement initiatives to reduce chronic disease complications and prevent unnecessary hospitalization among Medicare beneficiaries. Participating physicians will begin reporting data for 16 of the 36 clinical measures CMS has developed with endorsement by medical specialty societies. To eliminate the burden of having doctors collect quality data from chart abstraction, CMS has defined a set of HCPCS codes that can be submitted with the usual claims data. Confidential feedback reports are intended to help physicians improve the accuracy and completeness of the data they report. For more information, download this HHS article.
Physicians who regularly admitted to Tenet hospitals are sending fewer of their patients to those hospitals, reports a Los Angeles Times story. Tenet has 15,000 physicians practicing at 69 hospitals nationwide, but 9,000 of those physicians sent, on average, less than a dozen patients per physician last year compared to 17 patients per physician three years ago. Tenet reported three years of losses, including a loss of $286 million in the most recent quarter, and a 2.5% drop in patient admissions over last year in the fourth quarter alone.
To reverse this trend, Tenet has launched a Physician Sales Call campaign, sending teams of local hospital administrators to listen to physician grievances and to correct problems, such as improving OR efficiency or delivering diagnostic test results to physician offices more quickly. Results in California have been encouraging, with admissions up 1.4% last year.
Boston academic hospitals are preparining strategies to deal with a labor union known for its aggressive tactics, reports the Boston Globe. Local 1199 of the Service Employees International Union has targeted Boston because there are few unionized employees at the city’s teaching hospitals. According to the story, a Boston law firm is prepping hospital executives on the union’s strategies, like those used in a seven-year struggle with Yale-New Haven Hospital in Connecticut that stalled a $430 million cancer center, featured hospital executives on billboards, and shared with the media the hospital’s debt collection practices. Last week, Yale-New Haven and the union signed a deal allowing the cancer center to move forward and giving 1,800 hospital workers to right to organize in a secret vote. The union says its tactics were in response to hostile hospital management and that it just wanted a fair election.
Bolstered by a study that shows that 56% of hospital nurses and 64% of radiology technicians have suffered chronic pain or injuries from lifting or moving patients, AFT Healthcare, one of the American Federation of Teachers unions, is calling for hospitals to provide patient-moving equipment. (Click here to download the study.) According to a Newsday story, recently AFT and its New Jersey affiliate lobbied the state’s lawmakers to introduce a bill making the lifting equipment mandatory in hospitals. The AFT-commissioned study surveyed 509 hospital nurses and 404 radiology technicians and found that only 24% of nurses and 27% of radiology technicians currently use patient-lifting equipment--even if the hospital makes it available to them--and that 47% of nurses and 30% of the technicians have considered leaving patient care because of the heavy physical demands. More than 80% support mandates requiring hospitals to provide the equipment, which the study says is associated with a 23% reduction in the incidence of chronic pain and injury.
There were few surprises in a new report on quality ratings for 121 California hospitals that performed coronary artery bypass graft surgery in 2003. Nearly all of the hospitals performed as expected, with four exceeding expectations and four performing worse than expected. Statewide, the mortality rate, which includes all deaths in the hospital and up to 30 days after surgery, was 2.91%. The data showed that patients had a similar risk of dying at a hospital that did a low volume of CABG surgeries as they did at a high-volume hospital. Also, the risk adjustment model was appropriate and did not penalize hospitals for treating sicker patients.
The report, mandated by 2001 legislation, lays the foundation for public reporting of CABG outcomes and highlights the differences in mortality rates for California hospitals. The next report, to be released later this year, will also report on individual surgeon’s outcomes. California is one of only four states that use clinical data to report on hospital and surgeon outcomes for bypass surgery. Click here to download the report.
CMS announced that it will expand coverage for cardiac rehabilitation services to Medicare beneficiaries who have had heart valve repair or replacement, percutaneous transluminal coronary angioplasty or coronary stenting, or a heart or combined heart-lung transplant. CMS determined that cardiac rehabilitation services should include medical evaluation, education, and nutrition services. Medicare will continue covering cardiac rehabilitation services for beneficiaries following heart attack, coronary artery bypass surgery, and angina. While the evidence on the benefits for congestive heart failure is not sufficient for a coverage expansion at this time, says CMS, ongoing studies are likely to provide more certainty about the impact of cardiac rehabilitation for these patients. More details are available on the CMS coverage web site.
The U.S. Government Accountability Office identified “significant weaknesses” in how HHS and CMS protect sensitive medical and financial information, according to a GAO report released yesterday. The report, Information Security: Department of Health and Human Services Needs to Fully Implement Its Program, states that vulnerabilities in the HHS computer systems pertain to “network management, user accounts and passwords, user rights and file permissions, and auditing and monitoring of security-related events.” The report says that HHS has policies and procedures for information protection, but has not fully implemented them. HHS responded (to a draft version of the report) that the GAO’s evaluation “does not provide an accurate or complete appraisal of the HHS enterprisewide information security program…. HHS is proud of its information security program and the progress it has made….” Click here to download the report.
The Healthcare Administrative Simplification Coalition, a public/private partnership of organizations committed to reducing the administrative costs and complexity of health care, this week announced its support for PATIENT FRIENDLY BILLING®, an initiative spearheaded by HFMA in partnership with the American Hospital Association, the Medical Group Management Association, and other leading provider, consulting, and technology organizations. HFMA is also a member of HASC.
“The healthcare industry should strive to make patient financial communications clear, concise, correct, and patient-friendly,” said an HASC statement. “The needs of patients and their family members should be paramount when designing administrative processes and communications.”
CMS is making available the shared savings payment model and quality measurement and reporting processes used in the Medicare Physician Group Practice Demonstration to Medicare Health Care Quality Demonstration applicants. The model gives applicants a defined and industry-supported payment model and quality measurement and reporting process. Under the model, physician groups are eligible for performance payments derived from savings from better care management designed to anticipate patient needs, prevent chronic disease complications and avoidable hospitalizations, and improve quality of care. Applicants interested in the model should submit a letter of intent to CMS by April 28, 2006. Click here for more information.
April 1 is the deadline for hospitals to transition to a new registry to submit data regarding ICD (implantable cardioverter defibrillator) use. Medicare requires the data for hospitals to obtain payment for implanting ICDs for primary prevention clinical indications. Hospitals must report data on each primary prevention ICD procedure. The current tool for reporting this data, the ICD Abstraction Tool through Qnet, will no longer accept data beginning April 1, 2006. The American College of Cardiology National Cardiovascular Data Registry's ICD Registry will take the place of the ICD Abstraction Tool. In order to ensure that a complete and timely transition is made, hospitals should contact the ACC-NCDR immediately and should be enrolled with ACC-NCDR by April 1, 2006. Hospitals will need to work with the ACC-NCDR directly in order to participate. Information is available on the ACC-NCDR web site or by telephone at 1-800-253-4636, ext. 451. Click here to download information on reporting requirements from the Medicare National Coverage Determination Manual.
The proportion of U.S. physicians providing free or reduced cost care dropped 8% in the last decade, from 76% of physicians in 1996-97 to 68% of physicians in 2004-05, according to a national study released today by the Center for Studying Health System Change. In 2000-01, 71.5% of physicians provided such care. While the proportion of physicians providing charity care has declined, the number of physicians offering charity care has remained relatively stable because the overall number of U.S. practicing physicians increased in the last decade. The amount of physician charity care relative to the number of uninsured has dropped, with the number of charity care hours per 100 uninsured people falling from 7.7 hours in 1996-97 to 6.3 in 2004-05--an 18 percent decline. Most of this decrease has occurred since 2000-01, primarily because of the large increases in the uninsured, from 39.6 million in 2000 to 45.5 million in 2004.
"This study provides additional evidence of the serious breakdown of the system of cost shifting that for years supported charity care," said Richard L. Clarke, DHA, FHFMA, president and CEO of HFMA. "With government and private payers increasingly unwilling to pay the 'hidden tax' for charity care, the ability and willingness of physicians and hospitals to provide this care is more limited. This study further demonstrates the critical need for this country to address the problem of covering the uninsured. Only a focused effort, similar to the Bush Administration’s approach to universal adoption of the electronic health record, will solve this problem."
William F. Jessee, MD, FACMPE, president and CEO, Medical Group Management Association, commented, "There are probably a variety of reasons why this trend is emerging, but one of the principal ones is likely the rapidly deteriorating economics of medical practice.... The truth is that it's a bothersome change--but we don't really understand all the reasons why it's occurring."
Edward Hill, M.D., president of the American Medical Association, told HFMA, "Physicians are committed to providing charity care and nearly 70 percent of physicians provide uncompensated care worth more than $2,000 every week."
Attend HFMA's "Serving the Uninsured: Managing Your Mission and Margin" conference April 9-11 in Boston. Read more responses to this story at HFMA Views.
Attend HFMA's "Serving the Uninsured: Managing Your Mission and Margin" conference April 9-11 in Boston.
Read more responses to this story at HFMA Views.
Michigan is ahead of the national average for adoption of computerized physician order entry, a building block of electronic health records, according to a study released yesterday by Blue Cross Blue Shield of Michigan and the Partnership for Michigan’s Health (a group of state healthcare associations). The study also identified barriers to EHR development, including varying computer systems, a mix of nonstandard data elements, inconsistent code sets and medical vocabularies, the need to promote more e-prescribing and pharmacy integration, and the need for development of unique patient identification solutions. Recommendations to overcome these barriers included supporting development of regional EHRs, encouraging physician buy-in, and identifying common information needed to support patient care and safety. These barriers and solutions echo those identified in HFMA’s recent study Overcoming Barriers to Electronic Health Record Adoption. (Click here to download the HFMA report.)
The National Patient Safety Foundation, in cooperation with HFMA, is launching a new project to improve the adoption and integration of patient safety solutions. The NPSF Value Proposition Template Initiative seeks to create templates to describe the value proposition and the business case for various patient safety solutions in terms that are relevant to CEOs, COOs, CMOs, CNOs, CFOs, and CIOs so that the management team can have an informed dialog around such decisions. Michael D. Rowe, FHFMA, CPA, vice president of finance/CFO for SCL Health System in Lenexa, Kansas, will represent HFMA on the work group.
Half of hospital executives surveyed reported that their organizations lose at least $1 million and as much as $10 million each year because of inefficiencies in the claims remittance process, according to results of a survey by PNC Financial Services Group, Inc., and conducted by Chadwick Martin Bailey. Two-thirds of hospitals executives reported that they must resubmit or rework a claim two or more times before it is paid, while 21% reported resubmitting claims as many as six times. Most hospital executives reported that they believe lack of standards among payers is the reason most claims are delayed or denied, while payers surveyed gave patient ineligibility as the number one reason claims are denied or delayed. The survey showed opportunities to better employ technology to enhance efficiency and drive down costs. Click here to download survey highlights. Click here to download top-line findings.
A California HealthCare Foundation study offers a good-news/bad-news assessment of how Medicare Part D is working for the 4.3 million Medicare beneficiaries in that state. The study found encouragement because of more extensive coverage of certain drug classes resulting from federal protections and because the ten plans into which beneficiaries previously covered by Medicaid are automatically enrolled provide similar coverage to higher cost plans. However, the study suggests policymakers and advocates should be concerned that the Medicare Part D plans offer dual-eligibles inferior coverage compared with that provided under Medicaid, and that the overall process of selecting a plan is complex. Click here to download the report.
Standard & Poor’s analysts said Monday that a proposed Illinois law to mandate that hospitals devote 8% of their total operating costs to charity care “could potentially lead to lower ratings, more expensive access to capital, and an inability to maintain state-of-the-art services,” reports Crain's Chicago Business. The S&P report, Proposed Illinois Charity Care Bill Could Pressure Hospital Credits, also said that the bill could have the unintended consequence of lowering total charity care because higher expenses could force hospitals reduce community-benefit activities not included in the law’s definition of charity care.
Two Yale University scholars recently analyzed proposals to reform Medicare and concluded many of those efforts would undercut Medicare’s ability to serve its core purpose of social insurance. In an article on the Health Affairs web site, Theodore Marmor and Jerry Mashaw contend that “the core features of social insurance arrangements are both economically sensible and socially and politically acceptable.” They go on to say that while programs such as Medicare must change over time, reform efforts that emphasize increased risk for individuals and enhanced market competition conflict with the basic structure of social insurance programs.
The cost-efficiency of individual surgeons varies widely, according to a study recently published in the Journal of the American College of Surgeons. For example, one surgeon's costs were 45% lower than those of an arbitrarily selected reference surgeon, and the costs generated by six surgeons were at least 39% lower. The study did not identify causes for the variation, nor did it indicate whether cost and quality of outcome were linked.
In another sign that consumer access to healthcare price information is heating up, the healthcare rating company HealthGrades on Monday launched a web site that displays average list price, health plan portion, and out-of-pocket portion for 55 hospital-based procedures, by region. Prices include hospital, outpatient, physician, laboratory, and drug fees. The company reports that the average list price of procedures is lowest in the West and highest in the South, while the average amounts negotiated by health plans tend to be lowest in the Northeast and highest in the Midwest. Average out-of-pocket expenses are highest in the West and lowest in the Northeast.
Requiring not-for-profit hospitals to provide more charity care, as increasingly demanded by lawmakers and state attorneys general, "could cripple hospitals financially, would would not provide the necessary comprehensive health care, and would still leave us with the same root problem: an unacceptable number of uninsured people," wrote HFMA President and CEO Richard L. Clarke, DHA, FHFMA, in a letter this week to the editor of The New York Times. On Sunday, the Times published an article on efforts by Charles E. Grassley (R-Iowa), chairman of the Senate Finance Committee, and Bill Thomas (R-Calif.), chairman of the House Ways and Means Committee, to set clearer standards for the community services expected from not-for-profit hospitals. Attorneys general in Illinois, Kansas, and Minnesota also have begun investigating hospital billing and collection practices, “excessive” compensation paid to hospital executives, and whether the amount of free care not-for-profits provide justifies their tax-exempt status.
Clarke suggested that a better way to approach the problem of the uninsured would use the model the Bush Administration has employed to encourage adoption of electronic health records: "set an ambitious national goal with a deadline, appoint a senior official who is very competent and respected, identify the barriers, and encourage public/private partnerships to address them."
Learn more from HFMA's conference "Serving the Uninsured: Managing Your Mission and Margin."
Updated March 23, 2006
An annual Watson Wyatt/National Business Group on Health survey of 585 mid-sized and large companies found that the number of employers offering high-deductible plans combined with health savings accounts or health reimbursement accounts more than doubled this year, from 13% in 2005 to 29% in 2006. Another 33% of respondents say they plan to offer the plans in 2007.
According to the survey, 80% of the employers find consumer-directed health plans to be at least somewhat effective at increasing employee involvement in healthcare decision-making. But only 59% find such plans to be somewhat effective at controlling healthcare cost increases.
Best-performing companies--those with a median two-year average cost increase in the lowest quartile--are keeping cost increases to just 3% over the two-year period. Poor-performing companies, however, are experiencing an 11.5% increase. The median two-year cost increase for all companies is 8%. The survey also found that relatively few respondents are significantly increasing point-of-care cost sharing (26%), employee premium contributions (24%), deductibles (22%), or employee copayments (21%).
The movement toward making healthcare prices more transparent to consumers is bound to fail unless the OIG establishes a benchmark for reasonable charges that hospitals and suppliers can submit to Medicare and Medicaid, says Bill Thomas (R-Calif.), chairman of the House’s Committee on Ways and Means, in a recent letter to HHS Secretary Michael Leavitt. Thomas is calling for the OIG to finalize a rule it proposed in 2003 that would penalize providers who bill “an excessive level of charges” by ousting them from Medicare and Medicaid programs. Thomas claims that such overpayments to hospitals have cost taxpayers $9 billion over the years. “It is unacceptable that the OIG refuses to move forward on this rule,” writes Thomas. “The OIG apparently chooses to sacrifice the interests of taxpayers over those who wish to keep real prices shrouded in order to gouge the public, employers and insurers."
Cuts in Medicare payments to physicians, 34% over nine years, will harm seniors’ access to care, according to findings of a new survey by the American Medical Association. (Click here to download the survey findings.) Next year’s 5% Medicare cut will cause 45% of the physicians surveyed to decrease or stop seeing new Medicare patients. By 2015, when the cuts are in full force, 67% of physicians say they will decrease the number of Medicare patients they see. Survey respondents also said quality improvements will get sidetracked as Medicare payments plummet. Over the next nine years, 73% of physicians say they will defer purchases of new medical equipment and 65% will defer purchases of new information technology. “The current flawed Medicare physician payment system places seniors’ access to care at risk year after year by tying payments to the gross domestic product, instead of the healthcare needs of seniors,” says AMA president J. Edward Hill.
HHS’s Agency for Healthcare Research and Quality released an interactive web-based tool for states to use in measuring healthcare quality. The State Snapshot tool is based on the 2005 National Healthcare Quality Report and the 2005 National Healthcare Disparities Report. The tool ranks the states on 15 representative measures of healthcare quality, has summary measures of the quality of types and settings of care for each state, and compares state measures to regional and national performance. An in-depth section focused on quality and disparities of diabetes care and potential cost savings from implementing diabetes disease management. AHRQ will partner with four states this year to develop a complementary guide to the Snapshot tool to help states use the information for priority setting and quality improvement.
Faced with healthcare costs that have almost doubled since 2000 and with a $2.3 billion healthcare bill this year, Chrysler is increasing the amount salaried employees and retirees pay for health insurance in 2007, requiring those who earn more to pay more, reports an Associated Press story. On average, the salaried employee portion of healthcare costs will rise from 27% currently--about $3,000--to 31%. According to Chrysler, the employee portion of the increase will be highest for those who make the most, with executives likely to see an annual increase of $1,500 in their portion of health insurance costs. Retirees under age 65 will pay between 50% to 100% of the increase in their premiums, based on their salaries at retirement, and those older than 65 will receive a $1,750/year contribution to a healthcare savings account matched by an equal amount for spouses. The increases will affect 17,600 retirees and 14,900 employees.
In hearings on price transparency for healthcare providers before the House Energy and Commerce Subcommittee, economist Gerard Anderson, director of the Johns Hopkins Center for Hospital Finance and Management, testified about the difficulty of publishing hospital prices based on the inscrutable chargemaster file. (Click here to download the testimony.) Anderson told committee members that patients will not be able to decipher the 50,000 items on a charge master file, nor will they be interested in services other than those they personally need--often an unknown until the patient undergoes the procedure. The chargemaster file data are also meaningless for consumers because the prices do not reflect the prices that insurers actually pay, according to Anderson.
Anderson recommended that hospitals report their prices as a percentage of Medicare DRG rates. By looking at the percentage of the Medicare rate a hospital charges for various procedures, the consumer would get a general sense of how hospitals compare to each other and when a hospital’s charges deviate significantly from the norm. Consumers would be able to comparison shop based on how closely a hospital’s charges conform to Medicare rates rather than trying to determine prices for specific services.
With patients receiving only 55% of recommended care, the U.S. needs to concentrate on making large-scale changes to its healthcare system rather than focusing on fixing discrepancies in care between sociodemographic groups, according to a New England Journal of Medicine study. The study uncovered only small differences in care between demographic groups but found patients as a whole were receiving poor quality care 45% of the time.
Women fared better than men, receiving appropriate treatment 56.6% of the time compared to 52.3 percent for males. Blacks and Hispanics had slightly higher scores than whites, and those with annual household incomes over $50,000 had higher scores than those with incomes of less than $15,000 (56.6% vs. 53.1%). Health insurance provided access to care but did not guarantee quality of care.
The study referenced a previous analysis that showed Veterans Affairs patients get 67% of recommended care and suggested that the VA's mature electronic medical record system, automated order entry, performance incentives, and routine quality assessments allow it to deliver better quality care.
Publicly reported measures of hospital quality may not be yet changing consumer choices, but they are driving hospitals to improve their quality, according to a Mathematica Policy Research survey of hospital executives. (Click here to download the results.) Asked to gauge the impact of Hospital Compare, CMS’s hospital quality initiative that ranks hospitals on 20 quality-of-care measures, the majority of respondents said that their scores had consistently improved over time, but with 60% reporting some scores below the 50th benchmark, there is room for improvement. Over half said they had increased the number of staff dedicated to quality improvement and 60% upgraded computer capability to meet data reporting requirements. Among the barriers to improving quality scores were getting staff to accurate document their care, failing to engage physicians in quality improvement efforts, and lack of financial resources to implement quality improvement projects.
Continued belt-tightening in academic medicine caused primary care physicians to realize only a 0.21% increase in compensation from 2003 to 2004 for an aggregate median salary of $135,278, while specialty physicians’ aggregate median salary of $195,000 remained flat, according to the Medical Group Management Association’s annual academic practice compensation and production survey. The salary standstill followed increases of 5.38% in primary care and 7.93% in specialty care in 2003. In the last five years, however, specialists’ compensation has risen faster than that of their primary-care colleagues--14.10% compared with 6.51%--but primary-care compensation has increased more swiftly in academic practice than in private practice for the last decade. MGMA attributes the salary stagnation to academic medical centers’ increased operating costs and malpractice insurance premiums, and decreased reimbursement and funding. Academic medical centers are also bumping up salaries of human resources managers and information systems network administrators, reflecting medical schools’ growing complexity and emphasis on compliance related to clinical, research, human resources, and HIPAA matters.
A bill that would create the association health plans that President Bush has been calling for as a solution to small businesses’ healthcare crisis was passed yesterday by the Senate’s Health, Education, Labor, and Pensions Committee. An Associated Press story reports that while similar bills have been approved in the House eight times, the legislation has never before been approved in the Senate. The bill would allow small businesses to combine their purchasing power to negotiate better rates from insurers and exempt them from having to abide by state laws mandating coverage for certain conditions. The financial services consulting firm Mercer Oliver Wyman analyzed the impact of the proposed legislation for the National Small Business Association and found that insurance premiums would decrease by an average of 12% for small employers, and 8% of the uninsured in the small employer market would have access to affordable health insurance. (Click here to download the study.)
Health Net, California's third largest for-profit HMO, is offering the state’s first private health insurance with coverage in both Mexico and the United States. According to the Los Angeles Times, Health Net estimates that 600,000 people from Southern California cross into Tijuana each year seeking medical care. The plans cost as little as $75/month for 19- to 39-year-olds and $300 for families and will be marketed to the 2 million uninsured Latinos living in Los Angles, Orange, and Ventura counties, many of whom are self-employed or work for small companies.
Policymakers need to be realistic about the potential gains from price transparency, said health economist Paul B. Ginsburg, PhD, President of the Center for Studying Health System Change, in testimony before the House of Representatives hearing on how to provide consumers better information about healthcare costs. He pointed out that most of the 10% of people responsible for 70% of health spending will not be affected by “incentives to economize” because they will have exceeded their deductible and often the maximum out-of-pocket spending. He also pointed out that the benefit structure of managed care plans often means that consumers actually receive little or no financial benefit from choosing a low-cost provider. The government, said Ginsburg, should not interfere with the relationship between health plans and patients and “should focus instead on the needs of those without insurance.”
Although the U.S. population increased only 5% from 2000 to 2005, enrollment in 25 major federal social programs grew 17% during the same time, resulting in the largest expansion of entitlement programs since the 1960s, when Congress created Medicare and Medicaid. An analysis done by USA Today found that Medicaid was the fastest growing program, with 15 million beneficiaries added since 2000. The newspaper cited the following reasons for the increasing size of the country’s safety net: The process for applying for benefits is easier and more streamlined today, and Congress has loosened eligibility requirements, especially for those with low paying jobs as an incentive for getting people off welfare. Spending for the 25 programs USA Today analyzed amounted to $1.3 trillion in 2005--more than half of all federal spending.
CMS will soon make public information about the amount Medicare and Medicaid pays hospitals and physicians, HHS Secretary Michael Leavitt said in an address before the Commonwealth Club on Tuesday, according to a Reuters report. Leavitt said that the initiative will begin with compilation of price and quality data on 20 common procedures. Yesterday’s Wall Street Journal reported that the payment information would be public within “the next few weeks,” with additional information, derived from government and employer information, to be made available in select metropolitan areas in the near future. The information will identify specific hospitals and physicians, according to the Wall Street Journal.
Pharmacists who own independent pharmacies are now voicing their complaints that Medicare Part D has them cash-strapped and operating on razor-thin margins, according to an AP story. Before Medicare Part D took effect in January, independent pharmacies were reimbursed as often as weekly by states for filling Medicaid prescriptions, and seniors on Medicare paid full price for their drugs. Now, say the pharmacists interviewed for the story, the insurers that provide drug coverage under Medicare Part D are paying discounted prices that may not cover the pharmacy’s drug costs and they are receiving checks from the insurers less frequently, causing cash-flow problems. CMS says it is aware of the hardships independent pharmacists face and is exploring financial rewards for pharmacists who are successful in getting Medicare beneficiaries to switch to generics.
West Virginia took a big step closer to its goal of providing universal access to health care with the legislation that passed its House and Senate on Saturday. The healthcare bill expands eligibility to an additional 4,300 children in the Children’s Health Insurance Program, leaving only 834 children in the state without health insurance, reports the Herald-Dispatch. Adults who have lost health insurance will be offered a low-cost health insurance plan overseen by the insurance commissioner’s office, and a pilot program will be established to offer primary care for prepaid fees. The legislation also creates a council charged with developing strategies to ensure that eventually every resident of the state will have access to health care.
In the aftermath of corporate audit failures, it’s vital that auditors communicate openly about their findings with those charged with governance. The American Institute of Certified Public Accountants has issued a proposed Statement on Auditing Standards that spells out specific issues that need to be disclosed by auditors and provides guidance on how auditors should communicate with the management team when managers are also involved in governance. (Click here to download the draft SAS.) The proposed SAS outlines requirements for auditors to assess the adequacy of the communication with the governance team and how to document that issues relating to the audit were discussed. Comments on the exposure draft should be sent to Sharon Macey, Audit and Attest Standards, AICPA, 1211 Avenue of the Americas, New York, NY 10036-8775 or by electronic mail to smacey@aicpa.org no later than May 31, 2006.
The FDA has issued a guide to reduce life-threatening entrapments in hospital beds. In the last 21 years, the FDA received 691 reports of patients, mostly elderly, who became trapped in their hospital beds, resulting in 413 deaths, 120 injuries, and 158 interventions to avoid injuries. The guide, which resulted from a partnership of private and government groups, provides recommendations to hospital bed manufacturers in designing safer beds and to hospitals in assessing the risks of patients becoming caught, strangled, trapped, and entangled in existing beds. The online document characterizes the body parts at risk for entrapment, identifies the locations of hospital bed openings that are potential entrapment areas, and includes a description of recommended test methods for assessing gaps in hospital bed systems.
Nine out of 10 seniors who had received drug coverage through Medicaid but were automatically enrolled under Medicare Part D say they have experienced no problems using the new program, according to survey results released yesterday by America’s Health Insurance Plans. Among seniors who chose to enroll in the new Medicare program, 59% say they are saving money, while 23% say they are not (18% are unsure). Among those who regularly take a prescription drug, 79% say the plan covers the drugs they need, and 12% say it does not. Eighty-four percent of self-enrolled seniors say they had no problems signing up for the plan, and 85% have had no problems using the plan. “This is the most vulnerable population of seniors and our members are hard at work with CMS to resolve any remaining challenges that they are experiencing,” said Karen Ignagni, President and CEO of AHIP.
Since CMS announced in February that it would cover bariatric surgery, hospitals are working to demonstrate that they are market leaders for the procedure. A South Florida Business Journal article reports on Florida hospitals applying for designation as a center of excellence by the American College of Surgeons or the American Society of Bariatric Surgeons Surgical Review Corporation. This designation is necessary for Medicare payment for the procedure. Although hospitals and surgeons are hoping that private insurers will follow CMS’s lead and begin covering the surgery, insurers such as Blue Cross/Blue Shield of Florida and UnitedHealthcare were quoted as saying they have no plans to universally cover the procedure, citing doubts about its cost effectiveness. And should an employer specifically ask that bariatric surgery be covered, the insurers said they are developing their own list of preferred bariatric surgery centers.
Although most Americans get their primary health information from television, an analysis of the content of broadcast health stories showed them to be inaccurate, to lack recommendations, and to fail to discuss prevalence, according to a study published in the American Journal of Managed Care. Of the 1,799 health stories aired on 122 stations in October 2002, 76% covered medical conditions in a median of 33 seconds per story. The top two categories of stories were about infectious diseases and cancer (specifically breast cancer and West Nile virus), followed by ischemic heart disease, influenza immunization, and obesity or weight loss. Although West Nile was a new disease in 2002, the study is critical of the news coverage, which typically failed to cite the less than 1% risk of developing severe disease from the virus, and the lack of information on how to avoid the West Nile.
Cancer stories tended to focus on cancers of the breast, cervix, testicle, and prostate, with only a handful of stories discussing lung cancer—the leading cause of cancer death—skin cancer—the most common cancer—or colon cancer. Only 27% of news stories interviewed a health professional, and some stories contained harmful statements such as exercise may cause cancer and lemon juice is a substitute for HIV medications.
The Office of Inspector General announced that Miami’s South Beach Community Hospital is excluded from participating in Medicare, Medicaid, and all other federal healthcare programs for five years. (Click here to download the announcement.) The announcement came after the OIG determined that South Beach did not abide by the terms of a corporate integrity agreement it negotiated with the OIG in 2002 as part of the resolution of a False Claims Act case against the hospital. In December 2005, the OIG notified South Beach that it failed to meet multiple reporting requirements, did not retain an independent review organization to perform required audits, and failed to provide notification of the sale of the hospital. South Beach told the OIG that it would remedy the problems by the end of February, but the OIG concluded that the hospital had failed to take the necessary corrective actions by its deadline.
Baby boomers are changing the perceptions of aging, which will have profound implications for individuals and society, according to the report 65+ in the United States, which was commissioned by the National Institute on Aging. (Click here to download the 254-page report.) Within the next 25 years, the U.S. population age 65 and over is expected to double in size to 72 million. Although boomers have higher levels of education, which are linked to better health, higher income, more wealth, and a better standard of living in retirement, chronic illnesses continue to be a hallmark of aging. In 2000, chronic disease caused the most deaths among those 65 and older, with 33% succumbing to heart disease, 22% to cancer, and 8% to stroke. About 80% of today’s seniors have at least one chronic health condition and 50% have at least two. Although deaths from heart disease have dropped significantly, cancer deaths have risen in the last 40 years. Whether strides will continue to be made in increasing longevity is unknown said the report, which cites two prevailing views. One is that medicine has already extended life to its maximum of 85 years. The other is that medicine will continue to successfully battle disease, extending life expectancy to 100 years or more.
After a year-long study of quality improvement organizations, the Institute of Medicine of the National Academies concluded that QIOs should focus exclusively on providing technical assistance on quality improvement and pass off their other responsibilities, such as case management, to other organizations. The study says that with the growth of public reporting and pay-for-performance programs, QIOs’ most valuable function is to help providers improve their quality of care and their organizational cultures and information systems. A select few QIOs or other groups that have expertise in investigating medical complaints should be designated to handle Medicare beneficiary claims and appeals, which would also allow QIOs to sidestep the conflict of interest issue they face when they function as regulators in addition to quality experts. The report also called for strengthening QIO governing boards by including more representatives from other healthcare fields, consumers, and those with expertise in healthcare technology instead of having the boards be composed primarily of physicians.
An apology for a medical error goes a long way in healing anger in patients and remorse in physicians, but only 55% of medical organizations encourage their physicians to make mea culpas to patients. Surveys conducted by the American Society of Physician Executives found that 61% of physicians felt that patients are less likely to sue if medical mistakes are disclosed and apologies made, which was confirmed by the 57% of patients who said they’d be less likely to sue if they heard an apology. (Click here to download the results.) In contrast, 92% of patients said they’d be more likely to sue if the hospital or physician tried to cover up a mistake. Although several physician respondents said that patients demanded perfection in medicine and would never be appeased by an apology, 53% of patients agreed that mistakes in medicine are inevitable. And despite some physicians’ concerns that disclosing errors and apologizing for them would be used against them in court, at least 20 states exclude evidence of an apology in a malpractice lawsuit. Overall, 81% of physicians thought their organizations should encourage apologies after a medical mistake. The University of Michigan Health System does precisely that and, since 2001, it has reduced the number of lawsuits by half and cut litigation costs from an average of $65,000 per case to $35,000, resulting in a savings of $2 million.
CMS continues to explore refinements to the DRGs as part of the inpatient prospective payment system based on recommendations from MedPAC. However, a CMS spokesman said yesterday that “we have not made a decision” about recommending or making the changes.
Texas Gov. Rick Perry announced that Texas filed suit March 3 in the U.S. Supreme Court against Medicare’s new “clawback” policy, under which states pay the federal government for much of the drug coverage for “dual eligibles”--those eligible for both Medicare and Medicaid. "All Texas taxpayers can be assured that we are standing up against an unconstitutional federal policy," Perry said. "Texas will not foot the bill for a benefit that the federal government should responsibly provide to the American people." Texas has an estimated 323,000 dual eligibles. Using one formula provided by the federal government, Texas Attorney General Greg Abbott estimated that the “net loss” to Texas could be $100 million over the next four years. Texas was joined in its suit by Kentucky, Maine, Missouri, and New Jersey.
The practice of medicine needs to be fundamentally altered, and only scientific innovation can make this happen, says National Institutes of Health director Elias Zerhouni, MD, in an interview published yesterday on the Health Affairs web site. According to Zerhouni, increases in the intensity of care, and consequent increases in costs, have rendered the current method of medical practice unsustainable. The situation calls for “major changes, not changes at the margin,” the former Johns Hopkins professor declares. “Electronic medical records” would be nice, he says, “but they are at the margins.” The same is true for national health insurance: “Because you have no billing and no administration, you will gain another 5 percent. That’s not enough to make a dent.” The solution advanced by Zerhouni is to intervene earlier in the disease process, moving from a “curative” to a “preemptive” model.
Read the HFMA Views post on proactive health care and the "new consumerism."
The new consensus that the United States faces an impending physician shortage is challenged in the March-April issue of Health Affairs. According to Dartmouth researchers, the expansion of U.S. physician workforce training has been justified on the basis of population growth, technological innovation, and economic expansion. However, their analyses found a threefold variation in the amount of physician care given to patients at different academic medical centers in the last six months of life. They write that this variation is related to regional variations in physician supply. They suggest that it would be better to replicate the efficient care offered by interdisciplinary practices rather than train more physicians who will only generate increased costs for the healthcare system.
Medicare cuts proposed in President Bush’s FY07 budget are running into roadblocks in both the House and Senate. Republicans in the House of Representatives are speaking out against the cuts, according to a Reuters story, with a letter to Bush from Reps. John McHugh of New York and Jim Gerlach of Pennsylvania focusing specifically on hospitals: "Our hospitals are already stretching scarce resources to respond to the daily challenges of caring for all who come through their door,” the letter said. “Now is not the time for further reductions." Meanwhile, the Senate Budget Committee plans to drop Bush’s proposed Medicare cuts from the FY07 budget, according to an Associated Press story. Committee chairman Judd Gregg (R-N.H.) said the proposals didn’t have the necessary votes to pass, especially after ot
