Adjusting cost sharing to recognize clinical and financial differences among treatments and patients can improve care and save money, according to an article on “value-based insurance design” published on the Health Affairs web site. The authors, who are affiliated with the University of Michigan Center for Value-Based Insurance Design, advocate developing a “clinically sensitive” benefit design that encourages the use of cost-effective medical interventions by reducing or eliminating copayments, while raising cost-sharing requirements for inappropriate treatments that might otherwise be overused.
Employers are currently experimenting with two general approaches to VBID: targeting certain services deemed clinically valuable for copayment reduction, and lowering cost sharing for specific, high-value services for patients with specific clinical indications. The authors emphasize that “the driving idea behind VBID” is not saving money, but rather “that the use of high-value services should be encouraged.”
In a meeting in Detroit on Jan. 29 with Department of Health and Human Services Secretary Mike Leavitt, executives from GM, Ford, and Chrysler Group pledged to provide quality and price information about physicians, hospitals, and other medical providers for all enrollees in their health insurance programs. That same day, a group of about 30 other Michigan employers signed statements of support. The companies that signed, including the three automakers, cover nearly 2 million people.
In addition, the employers will support health IT by encouraging the use of recognized interoperability standards in the health IT products used by their health plans. They also pledged to develop incentives for achieving better value in health care, including incentives for high-quality care, and for more active involvement by employees in choosing their healthcare services. “Is it going to mean that healthcare costs are no longer the single biggest fixed cost in the car-making business? Not a chance,” DaimlerChrysler spokesman David Elshoff told the Associated Press. “But can it reduce the trend, or ... can we do something about the rate of inflation? Possibly.” Read the HHS news release.
Steve Case, founder of AOL, has launched a new web site that is geared to “reform health care with a ‘people-powered’ approach to health--giving parents, patients, and caregivers all the tools they need to manage their healthcare needs and live healthier lives,” according to Case. The web site, RevolutionHealth, will be free for the first year and then cost subscribers $100 a year to access the 125 tools and online services. Case says his web site differs from competitors--such as WebMD, which launched a similar free site recently--by allowing consumers to rate their physicians, hospitals, and treatment as consumers now rate movies and restaurants. It will also leverage concepts of social networking to bring patients with similar diseases together online, and it boasts of having the best medical content, also rated by users. In addition, it will provide a secure repository for personal medical records, and provide a telephone coach to help with health issues and insurance claim problems.
Consumers may not be receptive to a paid health web site or trying to fullfill all their healthcare needs online. RevolutionHealth is “talking about tying together a lot of different services, most of which no one has been very successful in developing,” Paul Ginsburg, president of the Center for Studying Health System Change, told The Wall Street Journal. Case, who invested $100 million of his personal money to create RevolutionHealth, according to the Journal, said that the company’s concepts will become mainstream after “a 20-year journey.” Read the press release.
Medicare patients treated at top-rated hospitals have a 28% lower in-hospital, risk-adjusted mortality rate than patients admitted to all other hospitals, according to an annual study released by HealthGrades. Patients who undergo surgery at high-performing hospitals also have an average 5% lower risk of complications during their stay. The study found that 158,264 lives may have been saved and 12,410 major complications avoided during the three years studied if the quality of care at all hospitals had matched the level of those in the top 5%. Hospitals with risk-adjusted mortality and complication rates that score in the top 5% receive HealthGrades’ designation as “Distinguished Hospitals for Clinical Excellence.”
For the 26 medical procedures and diagnoses on which hospitals’ performance is assessed, HealthGrades’ distinguished hospitals improved at a greater rate than other hospitals, lowering mortality rates by an average 11.74% from 2003 to 2005 and reducing postsurgical complication rates by 3.39%--more than twice as much improvement as all other hospitals.
CMS has issued a proposed rule to update the prospective payment system federal rate for long-term acute care hospitals by 0.71% to $38,356.45 for rate year 2008 instead of the 0% update recommended by the Medicare Payment Advisory Commission earlier this year. The proposed rule would also set the outlier fixed-loss amount for rate year 2008 at $18,477, up from $14,887 in rate year 2007. This threshold is projected to limit estimated aggregate outlier payments to 8% of total estimated payments under the LTC hospital PPS. Any revisions to the LTC diagnostic related groups and relative weights will be made at the same time as the hospital inpatient PPS update, on Oct. 1, 2007.
In addition to the update, CMS is extending its “25% rule” to apply to certain situations not currently covered under the existing regulations. Under this proposed policy, the payment adjustment would apply to virtually all LTC hospitals for which more than 25% (or the applicable percentage in certain special circumstances) of its discharged patients were admitted from an individual hospital, regardless of whether that hospital was located in the general vicinity of the LTC hospital. CMS also outlines an approach to revise the current payment adjustment formula for specific short-stay outlier patients. Medicare would include, as part of the SSO payment formula, the “comparable IPPS amount” for that particular DRG for those LTC hospital discharges with a length of stay that is less than or equal to an “IPPS-comparable threshold.”
Besides the LTC hospital PPS proposed changes, CMS is amending Medicare’s payment policies for graduate medical education payments to a teaching hospital when its residents are being trained in a nonhospital site. The proposed rule requires, as of July 1, 2007, that the teaching hospital pay at least 90% of the total costs of training residents in the nonhospital setting. To reduce the administrative burden of documenting those costs, CMS has also proposed to allow hospitals to use specified proxies to determine those costs. Download the proposed rule.
Healthcare alliance Premier, Inc., has announced that more than 260 hospitals participating in a joint Premier and Centers for Medicare and Medicaid Services pay-for-performance demonstration project improved their overall quality by 11.8% in two years based on 30 quality measures in five clinical areas. A study published in the Feb. 1 issue of the New England Journal of Medicine, however, found a more modest improvement in quality among the hospitals participating in the demonstration project.
Premier reports that improved performance prevented 1,284 deaths from acute myocardial infarction. CMS will award a total of $8.7 million in bonuses to 115 top-performing hospitals--a 2% bonus to the top 10% of hospitals, and 1% to hospitals performing in the second decile.
In the Journal article, however, researchers reported that they looked at 10 quality measures and found that 207 hospitals had a rate of improvement ranging from 2.6% to 4.1% over two years compared with a control group of 406 hospitals that voluntarily reported their quality scores publicly. Hospitals with the worst performance at the start of the pay-for-performance demonstration project in 2003, however, improved their scores on quality measures by 17.8%.
In an accompanying editorial, Arnold Epstein, MD, of the Harvard School of Public Health, warns against CMS developing “a single new payment system for all of Medicare” based on the results of the demonstration project. The findings, said Epstein, “still leave us with many uncertainties concerning the level of financial incentives needed and the optimal formula for payment that might be used for attaining high levels of performance.” He urged CMS to consider that “pay for performance is fundamentally a social experiment likely to have only modest incremental value.”
Data gathered in electronic health records and other health IT could dramatically expand the healthcare system’s research capacity, making it possible to combine information from millions of patients each year to advance medical understanding of such diseases as cancer and diabetes, according to studies published in a special edition of Health Affairs on “rapid learning.”
Articles showcasing the Veterans Health Administration, Kaiser Permanente, and the Geisinger Health System illustrate how clinical data captured in EHRs are being used to answer practical questions about the safety, effectiveness, and costs of new treatments much faster and more efficiently than the traditional process of randomized clinical trials alone could. Rapid-learning capabilities may help reduce health disparities affecting minorities and special-needs groups, give patients the ability to make better treatment decisions, and allow physicians to practice “personalized medicine” by revealing the effects of genetic variations on responses to treatments. But to make rapid-learning initiatives successful, it will take a national investment, leadership from both the public and private sectors, and an increased focus on government research, according to the authors.
Wisconsin Gov. Jim Doyle has announced he would include $30 million in his budget to fund grants and provide tax breaks to increase the use of electronic health records in Wisconsin. Under Doyle’s proposal, $20 million in grants will be available for not-for-profit organizations and $10 million will be used to fund tax breaks for for-profit entities. Doyle indicated that the challenge will be to have technologies in place that allow all systems to communicate quickly about patient care while ensuring confidentiality. “We applaud Gov. Doyle’s proposal to provide funding to healthcare providers,” said Wisconsin Hospital Association president Steve Brenton. “This aspect of his plan is especially important in rural areas to ensure that they are not locked out of the statewide implementation plan because of finances.”
President Bush’s budget for FY08--to be released Feb. 5--will contain several “incremental changes” in federal healthcare programs, including initiatives to slow the estimated 7% annual growth of Medicare spending, reports an article in the January 26 issue of The Wall Street Journal. In an interview with the Journal, Treasury Secretary Henry Paulson said, “When the budget goes up, you will see a number of changes relating to Medicare which are aimed at slowing the growth of these liabilities, slowing the trajectory.” Although Paulson declined to give details, the Journal says the budget would trim $90 billion in Medicare spending over five years, primarily by paying providers less.
Since President Bush announced a proposal during his State of the Union Address to give tax breaks to individuals to purchase healthcare insurance, many health policy experts have weighed in on the virtues and drawbacks of the plan. According to a Washington Post article, 100 million people with employer-sponsored health insurance will initially benefit from Bush’s plan, since they have policies that cost less than the $15,000 tax deduction. Also, the 17 million who purchase their own health insurance will pay less in taxes. But 30 million will experience a tax hike the first year. And after 10 years, only 60% of employer-sponsored policies will be worth less than the deductible--instead of 80% today--since premiums are expected to rise faster than the increase in the deduction, which is tied to inflation. Also, the poor won’t benefit from tax breaks, and they need the most financial help in obtaining health insurance.
Some say Bush’s plan may derail employer-sponsored health insurance entirely. “What it does is favor individual insurance,” Karen Davis, president of the Commonwealth Fund, told the Post. “The question is, should you try to undermine employer coverage? Employer coverage has lower administrative costs and it covers everybody in a firm, not just those who are healthy enough to pass a medical exam.”
Big business, which has typically been loath to push for a bigger government presence in the healthcare market, says revamping the healthcare system is now urgent, reports The New York Times. Helen Darling, president of the National Business Group on Health, was quoted as saying that in 30 years she has not seen this much frustration among business executives regarding the state of health care. And although there is little chance of healthcare reform before the 2008 elections, some observers say that government and business are finally ready to work together to make substantial changes. But the solution has to be a federal one rather than multiple state initiatives, Jack Bovender, chief executive of HCA, told the Times. “I think we need to move quickly but not grab at what appear to be quick easy fixes; things that sound good always have unintended consequences,” he said. Many business leaders are advocating that the first step in healthcare reform should be to find a way to cover the country’s 8 million uninsured children.
The Department of Health and Human Services has announced that it has awarded $103 million to 27 states to find new ways to improve Medicaid efficiency, economy, and quality of care. Additional grants of $47 million will follow later this year. No state matching funds are required for these special "transformation grants."
In part, the funds will support more widespread use of electronic health records that can be accessed by whole treatment teams. States can also use the grants to improve rates of collection from estates that owe money to Medicaid; reduce Medicaid waste, fraud, and abuse; increase the use of generic drugs; improve access to primary care doctors and specialists for the uninsured using integrated university-based hospital and clinic systems; and implement a medication risk management program.
The awards vary in amount depending on each state’s application. Some states submitted more than one grant proposal and will receive funds for each project.
With the second year of a three-year Medicare pay-for-performance demonstration project completed, the Centers for Medicare and Medicaid Services will award bonuses of $8.7 million to 115 hospitals that received the highest scores on 30 quality measures, reports The New York Times. Although all 266 participating hospitals have improved their quality of care--reducing heart attack deaths by 1,300, for example--some of the hospitals questioned whether the bonuses were rewarding the correct behavior.
Some said the financial incentives should recognize superior patient outcomes rather than processes of care. Others worried that the designated quality measures lagged research showing that newer treatments were better for patients. Community Health Partners in Lorain, Ohio, said the bonus paid for the cost of making quality improvements but that public reporting of the hospital’s scores were more of an incentive to perform well than the hope of receiving a financial reward. Several gave credit for their stellar performance to the open exchange of information among the hospitals. CMS officials said they were encouraged by the hospitals’ results and were evaluating the precise type of financial bonuses and quality measures that would be used if Medicare eventually links payments to quality of performance.
On Jan. 16, the University of North Carolina Health System’s board approved a number of changes to the system’s billing and collection practices, which will be implemented immediately. The actions were in response to community concerns expressed last summer. The changes include offering interest-free payment plans to patients for an extended period of time, limiting use of the state attorney general’s office to resolution only of commercial payment disputes, reviewing accounts with past-due amounts of greater than $15,000 to identify opportunities to assist with payments, requesting that the state exempt the health system from a law requiring state employees to pay debts to state institutions or face possible dismissal, and making plans for a federally funded community center to help increase primary care availability to the uninsured.
“The changes we are implementing must accomplish the overriding goal of extending the system’s mission,” said the board in a report announcing the new initiatives. “In order to serve our more than 400,000 patients a year, we are committed to fulfill our mission of meeting the health care needs of North Carolinians. We intend to remain diligent about improving our health care system.”
President Bush’s new proposal for broadening access to health coverage by reforming the tax code drew strong responses from both sides of the aisle and from myriad healthcare groups. Under Bush’s plan, health insurance provided by employers would be considered taxable income, and all Americans would receive a standard tax deduction for health insurance. Calling it a “middle-class tax cut,” Bush claims that the deduction would lower taxes for about 80% of people with employer-provided policies that are worth less than the deduction. And Americans who buy health insurance on their own would get an average $3,650 tax break in 2009, while uninsured people who purchase health insurance would get a $3,350 tax cut.
Rep. Pete Stark, D-Calif., chairman of the Ways and Means Health Subcommittee, said the subcommittee would not consider Bush’s proposal. “Under the guise of tax breaks, the President is pursuing a policy designed to destroy the employer-based healthcare system through which 160 million people receive coverage,” said Stark in a statement. “But in the individual insurance market, people will be denied coverage because of family history, existing illnesses, or genetic makeup. They’ll also be unable to take advantage of the cost savings that currently result from sharing risk company-wide.” Instead, the country should “build on what works,” by using Medicare as the “best model for healthcare reform.” Richard L. Clarke, president and CEO of the Healthcare Financial Management Association, said he believed Bush's proposal was a "short-term fix for a long-term problem." "Fixing the tax code in the short term may be a step toward better rationality," commented Clarke, "but it should not distract us from the longer-term issue of providing coverage for the uninsured."
House Republican Leader John Boehner, R-Ohio, however, called the proposal “promising” and said “it deserves a full and fair hearing in Congress.” The American Medical Association also applauded Bush for raising “the nation’s awareness of the inequities in the tax treatment of Americans based on individual versus employer-purchased health care. Bottom line: Americans with individually purchased health insurance pay taxes on the entire cost of their insurance, while those with employer-sponsored health coverage don’t,” said AMA President William G. Plested III, MD. Karen Ignagni, president and CEO of America’s Health Insurance Plans, called Bush’s tax incentives “common sense” and said they will “go a long way toward helping millions secure and maintain the coverage they need.” The Urban Institute worried, however, that the tax cuts would result in small businesses discontinuing health insurance and that they would do little for the “low-income people who most need help paying for insurance.”
Oliver Fein, MD, professor of medicine at Cornell University and director of Physicians for a National Health Program, scoffed at the idea that “fiddling with the tax system and peddling skimpy private health plans” will solve the problem of 47 million without health insurance. “Like other plans that rely on private insurers--e.g., the Massachusetts reform and the Schwarzenegger, AHIP, and Wyden proposals--it would leave millions without coverage and continue to squander $300 billion annually on private insurance marketing, bill collectors, and other useless bureaucratic activities,” he said. Brian Baum, president and COO, U.S. Preventive Medicine, saw a different problem that Bush’s tax proposal doesn’t address: lack of disease prevention. The solution to the country’s healthcare crisis is not to shift the costs of care but to emphasize “protocols and procedures that detect and treat health risks early, preventing them from becoming life-threatening diseases,” Baum said. Read the White House refutation of statements critical of the proposal. Read comments at HFMA Views.
The Commonwealth Health Insurance Connector--the board that is overseeing the implementation of Massachusetts’ universal coverage law--has sent insurers back to the drawing board to reduce the monthly premiums uninsured adults must pay to obtain mandated health insurance, reports The Boston Globe. To fulfill the state’s coverage requirements, insurers came up with a premium of $380/month--a price that could put the law in jeopardy, said the board, which was expecting a premium price of about $260/month. “Clearly, $380 is not what we consider affordable” for minimal coverage, Jon Kingsdale, executive director of the board, told the Globe. Uninsured adults earning 300% of the federal poverty level and above--about 200,000 of Massachusetts’ residents--are expected to buy the state-sponsored insurance, while those earning less are eligible for state-subsidized coverage.
The board’s requirements for “reasonably comprehensive coverage” include primary care, emergency services, hospitalization benefits, mental health services, and prescription drugs with an annual out-of-pocket limit of $5,000 for an individual and $10,000 for a family. Deductibles are not to exceed $2,000 per individual and $4,000 per family, but the board said it would reconsider the benefits if necessary. Insurers said it will be “a huge challenge” to offer those benefits for less.
"The Connector took the right step" in requiring insurers to submit more affordable proposals, said Robert Gibbons, interim president and CEO of the Massachusetts Hospital Association, in a statement. "We are hopeful that the right balance can be struck and that affordable and meaningful plans can be introduced to attract more people into health coverage."
The Internal Revenue Service now offers a free web-based version of its Exempt Organizations Workshop, which covers tax compliance issues that small and mid-sized tax-exempt organizations face. “Stay Exempt: Tax Basics for 501(c)(3)s” has five interactive modules:
* Tax-Exempt Status--How can you keep your 501(c)(3) exempt?* Unrelated Business Income--Does your organization generate taxable income?* Employment Issues--How should you treat your workers for tax purposes?* Form 990--Would you like to file an error-free return?* Required Disclosures--To whom do you have to show your records?
Registration is not required, and workshop users remain anonymous. The modules can be completed in any order and repeated. Read the announcement.
Oncologists and their patients aren’t necessarily on the same page when it comes to communicating information, according to an abstract presented recently at the Gastrointestinal Cancer Symposium in Orlando. Among patients with colorectal cancer who had already undergone chemotherapy, 36% of them said they would be willing to repeat the experience if it yielded a 1% absolute reduction in relapse, and 57% said they would submit to another round of chemotherapy if it reduced cancer recurrence by 3%, reports MedPage Today. Yet only 19% of the patients’ physicians said their patients would agree to more chemotherapy for a 1% reduction in relapse.
The study emphasizes “the importance of better communication between physicians and patients to ensure that physicians clearly understand patient expectations regarding treatment, and so that patients receive clear and accurate information about the risks and benefits of therapy,” said Neil Love, MD, president of Research in Practice, an oncology education company. Love also found that many patients received their primary information about chemotherapy from the Internet or from friends and relatives, which often proved to be incorrect.
A standard tax deduction for health insurance will “level the playing field,” according to President Bush in Tuesday’s State of the Union address. “When it comes to health care, government has an obligation to care for the elderly, the disabled, and poor children. We will meet those responsibilities. For all other Americans, private health insurance is the best way to meet their needs.” The president’s proposal--to be implemented in 2009--would provide a standard deduction of $15,000 for purchase of a family policy and $7,500 for purchase of a single policy. For the uninsured, the proposal is intended to provide an incentive to purchase insurance. For those who get health insurance through their employers, this proposal would provide the incentive to purchase lower-cost insurance and pay for more health care out of pocket. The proposal is designed to be revenue neutral. “People will be purchasing higher-value plans, they’ll be allocating their healthcare dollars more efficiently,” said Katherine Baicker of the president’s Council of Economic Advisors at a White House press briefing yesterday. “We think that will bring down national health spending both immediately, as people change the quantity of health insurance versus wages that they take in their compensation packages, and even more in the long run, as there’s an incentive to develop a more rational, efficient healthcare system.”
In addition, the president proposed an initiative called Affordable Choice that would allocate existing federal healthcare dollars to help states provide basic insurance to those who are poor or hard to insure.
American Hospital Association president Richard Umbdenstock said the proposal was “unworkable for many and not focused on those most in need.” He said the proposal would encourage purchasing from the unstable small group insurance market, that “even with a tax break, coverage remains unaffordable and out of reach” for many, and that the proposal could “undermine the employer-based system.”
In his State of the Union address, the president also called on Congress to “expand health savings accounts…encourage price transparency…and protect good doctors from junk lawsuits.”
The American College of Physicians has proposed new policy recommendations to reform Medicare, Medicaid, S-CHIP and other programs. Stating that primary care medicine is on the brink of collapse in the United States with too few new physicians going into the field, the ACP is advocating a patient-centered healthcare system that it says will result in better quality, more efficient use of resources, reduced utilization, and higher patient satisfaction.
In this new model, patients would receive “longitudinal” and comprehensive care by a personal physician who is responsible and accountable for managing the care of the whole patient. It also depends heavily on health information and other system improvements to enhance access to care, provide evidence-based guidelines at the point of care, allow physicians to follow up on recommended treatments and patient self-management plans, and to measure and report on the quality of care. The ACP emphasized that patient-centered care should be available to all Americans, not just those who are insured.
The group also released nine recommendations to reform current Medicare physician payment and delivery systems. They include paying physicians on a risk-adjusted, bundled, and prospective basis for providing patient-centered care through a qualified medical home instead of paying doctors solely on the volume of services billed. The ACP also proposes an alternative to Medicare’s sustainable growth rate formula that will stabilize payments and create incentives for physician participation in programs that will result in quality improvements and cost savings.
Several New York hospitals slated for closure or mergers by the state’s Commission on Health Care Facilities in the 21st Century are fighting for their survival through lawsuits and direct appeals to the state’s Department of Health. The commission’s recommendations, which now carry the force of law, included closing nine hospitals and seven nursing homes and merging or downsizing another 48 hospitals and 14 nursing homes. Several hospitals on the list have filed a lawsuit against the commission, claiming that it was illegally established and that its commissioners should have been elected, reports Newsday. Whether the Department of Health has the power or authority to negotiate with healthcare facilities on the commission’s list is unclear, says Newsday, and New York Gov. Eliot Spitzer only recently appointed his administration’s new health commissioner.
Alegent Health, a nine-hospital healthcare system in Nebraska and Iowa, is providing patients with an online tool that gives projected costs for 500 common treatments and procedures based on individuals’ health plans, along with their out-of-pocket responsibility. Uninsured consumers will see a list of self-pay prices for frequently purchased services as well as information on financial assistance programs. By late spring, Alegent estimates that more than 75% of its patients will be able to obtain cost information through the My Cost tool. The healthcare system hopes to add professional fees in the next six months to a year. Read the press release.
Chairman Charles Rangel, D-N.Y., and ranking member Jim McGrery, R-La., enumerated the priorities of the House Committee on Ways and Means in a letter sent to the chairmen of the House Government Reform and House Administration committees. Among the many oversight activities that the Health Subcommittee will tackle during the 110th Congress is the Medicare program, including examining the relationship between payment policy and the future supply of doctors; overpayment to providers; waste, fraud, and abuse; the adequacy of cost-sharing arrangements; quality improvement initiatives; accreditation; and treatment of low-income beneficiaries and those with disabilities. For Medicare Part D, the subcommittee will evaluate administrative costs, drug pricing, formularies for covered drugs, and late enrollment penalties. The agenda also includes oversight of health coverage and the uninsured, options to expand coverage, and the use of health savings accounts and their influence on healthcare spending. In addition, the subcommittee will review emergency health care and possible reforms, health IT, price and quality transparency efforts, and the Centers for Medicare and Medicaid Services’ budget, accountability, and staffing.
The Subcommittee on Oversight named as one of its priorities evaluating “overall IRS efforts to monitor tax-exempt organization activities, prevent abuse, and ensure timely information to the public about charity activities and finances.” The subcommittee will also review how tax provisions “affect charitable efforts and the ability of these organizations to serve those in need.” Read the letter.
Providers in Texas and North Carolina are among those who have joined with financial services companies to issue credit cards to pay for medical expenses, such as Citibank’s Citi Health Card, reports The Boston Globe. Patients who agree to pay down the debt quickly aren’t charged interest, but those who can’t make the payments incur interest charges in excess of 20%. Tenet Healthcare Corporation is trying a different tack in offering employees with medical debt a line of credit to pay it off. Copayments are also automatically deducted from employees’ paychecks. Yet a recent survey by the Access Project and Demos found that many lower-income consumers who carry medical debt on credit cards fall even deeper into debt because of high interest rates. “The healthcare safety net is made of plastic--it’s called ‘credit cards’ for many people,” Mark Rukavina, director of Access Project, told the Globe. “It’s a pretty frightening prospect.”
In 2004, hospitals spent $2.6 billion to treat birth defects, which were responsible for more than 139,000 hospitalizations that year. A new statistical brief from the Agency for Healthcare Research and Quality indicates that more than half the cost, about $1.4 billion, went toward treatment for cardiac and circulatory congenital anomalies. These conditions accounted for more than one-third of all hospitalizations for birth defects, and they also had the highest in-hospital mortality rates.
According to the report, hospitalizations for cardiac and circulatory congenital anomalies were up by 28.5% and those for digestive congenital anomalies rose by 25.3% from 1997 to 2004. Pyloric stenosis was the most common primary cause of hospitalizations for birth defects, accounting for 9%.
As part of its new portal, WebMD is offering consumers a free service to store and maintain their personal health history in a secure, centralized location in order to take a more active role in managing their health. Consumers can compare their personal health scores with those of their peers and track their progress against a personalized WebMD health plan. In addition, a personalized report is provided with potential health risks to discuss with the consumer’s physician. Through the WebMD proprietary database, consumers can also find a physician and make an appointment using an online application. In addition, online tools let them do sophisticated searches for medical information, including the “symptom checker,” which allows people to pinpoint potential conditions associated with physician symptoms. And for even more connectivity to the medical community, the new portal has 140 expert-led and peer-to-peer message boards in addition to physician and patient blogs. The WebMD Health Network reaches more than 35 million visitors a month. Read the press release.
In his radio address to the nation on Saturday, President Bush offered a preview of the healthcare initiatives he will propose during his State of the Union Address on Jan. 23. Chief among them is a change in the federal tax code, which Bush believes will provide an incentive for Americans to acquire health insurance. The current tax code, said Bush, “encourages workers to choose overly expensive, gold-plated plans” that become increasingly unaffordable as premiums rise. Applauding the states that have already launched healthcare reform proposals, Bush said he will “announce a new effort--led by Health and Human Services Secretary Michael Leavitt--to help governors reduce the number of people in their states without private health insurance.”
Affordable basic insurance does not require raising taxes or creating a new entitlement program, according to Bush. Rather, the solution to insuring more Americans will result from health savings accounts, association health plans that provide discounted insurance for small businesses, medical liability reform, and price and quality transparency. Bush also said that Medicare, Medicaid, and the State Children’s Health Insurance Program must be strengthened for future generations. Read the transcript of the address.
The Health Coverage Coalition for the Uninsured, comprising 16 of the nation’s leading healthcare organizations, has announced that it has developed a proposal that would expand health coverage for the country’s uninsured, starting immediately with broader coverage for children in 2007. The agreement includes a balance of private and public initiatives representing the consensus of diverse advocates and is intended to serve as a healthcare reform model for Congress and the president.
HCCU participating organizations include AARP, American Academy of Family Physicians, American Hospital Association, American Medical Association, American Public Health Association, America’s Health Insurance Plans, Blue Cross and Blue Shield Association, Catholic Health Association, Families USA, Federation of American Hospitals, Healthcare Leadership Council, Johnson & Johnson, Kaiser Permanente, Pfizer Inc., United Health Foundation, and U.S. Chamber of Commerce.
The proposal calls for two phases. In the first phase, low-income families would be able to enroll uninsured children in the State Children’s Health Insurance Program or Medicaid at the same time as they apply for other public programs, like reduced-cost lunches or food stamps. The proposal also promotes a new tax credit to help families cover some of the cost of providing private health insurance for their children.
The second phase of the coalition’s proposal, which focuses on uninsured adults, would give states the flexibility and funds to expand Medicaid eligibility to cover all adults with incomes below the federal poverty level. For those with higher incomes, a tax credit would help individuals cover the costs of private insurance.
“Reaching consensus is a long and sometimes difficult process, but every participating group put the interests of America’s uninsured first--even when doing so meant walking away from certain long-held positions,” said Scott P. Serota, Blue Cross and Blue Shield Association president and CEO.
This year not-for-profit hospitals and health systems will have stable, although somewhat softer, operating performance compared with 2006, predicts Moody’s Investors Service. The sound economy, relatively favorable Medicare rates, and hospitals’ strategic initiatives bode well for fiscal performance in 2007. But the midterm outlook for 2008 and 2009 is “uncertain” as not-for-profit hospitals face increasing inpatient and outpatient competition from other providers, lower Medicare reimbursement and continuing decreases in commercial rates, physician shortages, more uninsured patients, and higher capital spending. “These factors will most likely weaken hospital financial performance, further challenging management to control expenses as many of the current and proposed large capital projects financed by debt and cash on hand come on line,” says Moody’s. For more information about this report, call Moody’s at 212-553-4431.
Hospital-acquired infections, medical errors, and preventable complications would come under closer scrutiny in Pennsylvania Gov. Ed Rendell’s sweeping new proposal to cover the state’s 767,000 uninsured residents while improving healthcare quality and cutting costs.
The initiative would require hospitals to track infections with electronic monitoring systems to prevent underreporting, according to The Philadelphia Inquirer. Rendell said extended hospital stays and increased deaths from hospital-acquired infections cost the state $1 billion a year. Under the proposal, the state would stop paying hospitals for treatment resulting from medical errors or preventable complications. Hospitals also would have to offer a primary care option for individuals who come to the emergency department but don’t have urgent health problems. The plan calls for the creation of a system of regional boards to oversee hospital spending to prevent expansions or major equipment purchases that are unnecessary.
Rendell’s plan comes on the heels of a similar proposal from Gov. Arnold Schwarzenegger to cover California’s uninsured. Massachusetts, Maine, and Vermont have similar plans. Rendell wants the state legislature to approve his plan by June 30 so it can take effect in January 2008.
In December 2006, hospital prices rose 0.5% over the previous month and were 3.8% higher than they were 12 months earlier, according to the Bureau of Labor Statistics’ Consumer Price Index. For general medical and surgical hospitals, the one-month price increase was 0.4% and for specialty hospitals it was flat. From December 2005 to December 2006, prices rose 3.7% for general medical and surgical hospitals and 10.2% for specialty hospitals. The Consumer Price Index is a measure of the average change in prices of goods and services purchased by American households. Read the news release.
The Maryland law requiring employers with more than 10,000 employees to spend a minimum of 8% of payroll for employee health insurance has been struck down by the U.S. Court of Appeals for the Fourth Circuit, reports The Baltimore Sun. The three-judge panel sided with a previous lower court ruling, and stated that the law violates the federal Employee Retirement Income Security Act. The state attorney general now must decide whether to ask the entire Fourth Circuit Court to review the decision or accept the panel’s decision that the law is illegal. State legislators agree that they must propose new solutions to cover the uninsured, whether or not they include employer mandates. “We’ve got to decide what the package is going to be, how much it’s going to cost, and how to get to it,” state Sen. Thomas Middleton told the Sun. “I wouldn’t say that we’ve ruled out employer mandates.”
Ten hospitals and health systems made Fortune magazine’s list of 100 best companies to work for in 2007. Methodist Hospital System in Houston, which ranked ninth out of 100 employers, was cited for giving employees $250 gift cards to spend on gas when oil prices rose. Griffin Hospital in Derby, Conn. (21), has been visited by more than 580 hospitals to learn about its outstanding patient service. Children’s Healthcare of Atlanta (35) offers employees lifestyle benefits such as back-up care for children and elderly parents as well as pet insurance, while employees at Northwest Community Hospital in Arlington Heights, Ill. (37), get tuition reimbursement, enhanced loans for radiology and nursing school, concierge service, and $5,000 “forgivable” loans to buy a home. Columbus-based OhioHealth (52) offers concierge service to employees; Baptist Health Care in Pensacola, Fla. (54), shares all news, good and bad, with employees as part of its “no secrets” policy; and Mayo Clinic (62) provides comprehensive health insurance that includes a pregnancy advisor, 24-hour nurse hotline, and full coverage for retirees. At Lehigh Valley Hospital and Health Network in Allentown, Pa. (80), employees pay nothing for health insurance and receive bonuses for high patient-satisfaction scores and financial results; at the six-hospital company Baptist Health South Florida in Coral Cables (81), nearly 70 nurses earned more than $100,000, and turnover is 13% compared with a national average of 20%; and at Memorial Health in Savannah, Ga. (91), employees who receive high patient-satisfaction scores are given bonuses of up to $500.
More insured Americans are charging copays and uncovered healthcare costs and, consequently, developing greater credit card debt, according to a new report by Demos and the Access Project. Twenty-nine percent of low- and middle-income households with credit card debt reported that medical expenses contributed to their current balances. Within that group, 69% had a major medical expense in the previous three years. Those with medical debt had a credit card debt of $11,623 versus $7,964 for those without medical debt. The medically indebted are also more likely to be called by bill collectors than those without such debt (62% versus 38%). And average credit card debt was higher for those without health insurance ($14,512) than for those with coverage ($10,973).
Among the reforms the report calls for are national guidelines to differentiate medical debt from consumer debt; preventing providers from sponsoring credit cards and revolving lines of credit; and increased oversight of medical credit cards and lines of credit attached to health savings accounts. Demos is a nonpartisan public policy research and advocacy organization; the Access Project conducts research on improving health care and access to medical care. Read the report.
As expiration of the State Children’s Health Insurance Program nears, Congress faces a potential battle over funding the popular program at levels that will keep pace with the increasing cost of health care, according to the Los Angeles Times.
Currently, SCHIP is financed with a $5 billion annual allocation. If Congress renews the program with no funding increase, government estimates indicate that 1.5 million children could lose their coverage by 2012. Maintaining current coverage will require an additional $13 billion to $15 billion over five years, the Times reports. Failure to renew the program would leave up to 6 million children without coverage. President Bush is expected to ask for an increase for SCHIP in his proposed budget next month--but that could mean cuts in other healthcare programs, which Democrats would oppose.
SCHIP, said former Medicare administrator Mark McClellan, “has proven to be a very popular program with strong bipartisan support, and a very cost-effective way to cover kids.”
Seven out of every eight hospital executives, administrators, and managers believe that emergency department overcrowding has failed to improve at their facilities in the past year, according to a new survey by the American College of Emergency Physicians and TeleTracking Technologies. Sixty percent of the 200 survey respondents say that overcrowding continues to force hospitals to divert patients needing urgent medical care to other facilities. And more than 70% say that although their facilities have a stated goal of admitting patients from their ED within two hours of arrival, 48% fail to meet that goal more than half the time.
To alleviate the overcrowding problem, 57% of survey respondents said they are considering expanding bed capacity to relieve patient-flow challenges, with another 58% saying that added capacity is either at the top or near the top of their priority list. Also, 94% said they believe that using technology to better manage the flow of patients, in combination with changes in staff and processes, can reduce ED overcrowding.
Researchers at RTI International, under contract with the Office of the National Coordinator for Health Information Technology, are seeking comments from healthcare leaders, providers, and the general public on model recommendations to prevent medical claims errors and detect healthcare fraud that will be recommended for use in electronic health record systems. The standards aim to improve claims accuracy and to reduce the ability for individuals to create fraudulent claims and other improper payments against public and private healthcare plans.
Registration is required to view the recommendations and supporting materials, as well as to provide comments. The end date for public comments is Jan. 22. Questions can be directed to antifraud@rti.org or 312-456-5276.
The U.S. House on Jan. 10 passed a $2.10 increase in the minimum wage to $7.25, which would be phased in over two years. But the bill does not stand a chance of surviving in the Senate unless it also includes tax breaks for small businesses, reports CQ Weekly. Senate Democrats, however, have said that they are not opposed to some of the tax relief measures for small businesses being proposed by Republicans.
Small rural hospitals could receive less revenue under a proposed rule that would require governmentally operated healthcare providers to keep their full Medicaid payments rather than funneling a portion of those payments back to the state. Under the proposal, reimbursements to healthcare providers operated by governmental units could not exceed the cost of services. About 1,150 hospitals nationally are operated by governments or hospital districts, many in rural areas.
Upon issuing the rule, the Centers for Medicare and Medicaid Services reported that since 2003 it has uncovered numerous instances in which healthcare providers were required to refund a portion of their Medicaid payments, which states in turn used to pay for costs outside the Medicaid program. As a result, CMS said it often is overpaying for services. The proposed rule, which is subject to a 60-day public comment period, would save Medicaid nearly $4 billion over five years.
Three organizations with more than 50 million members have joined forces to demand action on affordable health care and long-term financial security in a partnership called Divided We Fail. AARP, Business Roundtable, and Service Employees International, North America’s largest healthcare union, have announced that they will work together to push the American people, elected officials, and the business community to find broad-based, bipartisan solutions to both of these issues through traditional grassroots work, advertising in national outlets and in the primary states, and online activities.
The groups’ platform is that all Americans should have access to affordable, high-quality health care, that wellness and prevention should be top national priority, and that Americans should have more affordable long-term care options. Divided We Fail is also calling for Social Security to be strengthened, an end to age discrimination for older individuals who want to keep working, and easier access to financial tools to manage money. “We all agree that the health and long-term financial security crisis in America needs to be addressed by our political leaders, and these individuals need to be held accountable for taking these issues on,” said Bill Novelli, AARP’s CEO. “Congress and the President must act soon before our options become too few and the costs prohibitive.” Read the fact sheet.
Seven Maryland hospitals have improved patient care, efficiency, staff satisfaction, and revenue by importing a pilot program from Britain’s National Health Service, according to New Ways of Working: Improving Workflow on Patient Care Units, a report issued jointly by the American Hospital Association and the Maryland Hospital Association. The NHS initiative uses workforce changes, particularly in job or role redesign, to improve patient services. The objectives of the pilot were to assess the applicability of the NHS model in the U.S. healthcare system and evaluate whether it could help U.S. hospitals develop more effective ways of working. The pilot was a joint project of the AHA and the MHA.
Case studies document results that each of the seven hospitals was able to achieve, including shorter times to admission, shorter lengths of stay, fewer operating room cancellations, increased surgical cases and diagnostic procedures, and more effective interdisciplinary teamwork.
More than 100 of the country’s largest companies now offer full-service primary care clinics at the workplace, and 150 more companies say they plan to follow suit by the end of this year, reports The New York Times. Days ago, Toyota opened the largest company clinic--a $9 million, 20,000-square-foot facility in an assembly plant in San Antonio, Texas. The goal of employer-sponsored clinics is to give workers a convenient alternative to more expensive emergency departments, urgent care centers, and hospital outpatient clinics.
An on-site medical clinic serving a couple thousand employees can save an employer $1.5 million to $2 million a year in lower medical bills and higher worker productivity, according to a consultant with the Watson Wyatt benefits consulting firm. Florida Power and Light says its three company clinics return $1.50 in savings for each $1 it spends delivering health care. To get around employee privacy concerns, many employers are using independent medical vendors to run the clinics. Pepsi Bottling, with 15 clinics and another 15 in the planning stage, contracts with a unit of Johns Hopkins University to staff them, for example. “Employers are so frustrated with health costs that they are looking for any solution,” Dee W. Edington, director of the Health Management Research Center at the University of Michigan, told the Times.
The Pension Protection Act of 2006, enacted last August, established new reporting requirements for tax-exempt organizations. These changes to the tax law pertain to Forms 990, 990-EZ, 990-PF, 990-T, and 4720. Because the 2005 forms and instructions will not be amended to reflect these new requirements, the IRS has provided sets of instructions to be used in preparing and filing these returns.
CMS has announced that 10 states will be chosen to demonstrate whether health opportunity accounts, in combination with high-deductible insurance plans, can reduce inappropriate medical services by giving Medicaid beneficiaries a greater role in their healthcare decisions.
State Medicaid directors have been invited to apply to participate in the five-year demonstration project, which permits states to set aside cash accounts for Medicaid enrollees that can be used to pay for medical expenses in order to meet the out-of-pocket costs associated with high-deductible insurance plans. The insurance plans offered to Medicaid enrollees who volunteer to participate in the demonstrations will encompass all standard state Medicaid benefits.
The Deficit Reduction Act allows states to use state funds and federal matching dollars to deposit up to $2,500 per adult and $1,000 per child into a health opportunity account. People who become ineligible for Medicaid but have remaining balances in their health opportunity account can use the balance for up to three years to cover medical expenses or to purchase private health insurance coverage. Individuals who have had a health opportunity account for more than one year before becoming ineligible may use any surplus funds for such things as job training programs or tuition payments.
Seventeen states will receive more than $23 million in grants for FY07 and up to $900 million over five years for demonstration programs that will help build Medicaid long-term care programs to keep 20,000 in the community and out of institutions. This initiative, known as Money Follows the Person--referring to using funds to fulfill an individual’s own preferences--was included in the Deficit Reduction Act of 2005, which made changes in Medicaid that will allow states to add home- and community-based services to their permanent array of benefits without having to go through a waiver program. A second round of state grants may be announced later this year using 2007 grant money.
With the grants, states are expected to eliminate barriers that prevent Medicaid beneficiaries from receiving long-term care in settings of their choice; ensure continued provision of home- and community-based long-term care services to individuals who move to a community setting; and provide quality assurance for individuals receiving Medicaid home- and community-based long-term care services. States receiving grant funds may be eligible to receive a higher percentage of federal matching dollars to help cover the costs for people moving out of institutions and into community settings. Read the press release.
Despite actuarial data indicating that government negotiating with drug makers would not produce cost savings in Medicare’s drug benefit, the House passed legislation requiring such negotiations to lower drug prices for Medicare beneficiaries. The vote may be largely ceremonial, however. With a 255 to 170 margin, the bill did not pass with enough votes to override a promised presidential veto and the Senate has yet to act.
In a statement issued after the House vote, Health and Human Services Secretary Michael Leavitt said the legislation “was hastily adopted without hearings in the House.” A day before the vote, the Centers for Medicare and Medicaid Services announced that an independent actuary had determined that government negotiations, without a formulary or preferred tier, would not be able to influence Part D drug prices.
Pharmaceutical companies “would have little to gain by offering rebates that aren’t linked to a preferred position of their products, and we assume that they would be unwilling” to negotiate, said Paul Spitalnic, director of the Parts C and D Actuarial Group in the Office of the Actuary. Earlier, the Congressional Budget Office said mandated negotiations would have a “negligible effect” on Part D spending.
Consumer health organization Families USA, however, released a report a few days before the House vote showing that the median difference for Medicare Part D prices for the top 20 drugs prescribed to seniors is 58% higher than what the Department of Veterans Affairs charges for the same drugs. According to the report, the prices charged by plans sponsored by the five companies with the largest Part D enrollment are 50% to 75% higher than the VA price for Celebrex; 51% to 82% higher for Lipitor (10 mg); 69% to 95% percent higher for Nexium; 205% to 261% higher for Fosamax; 435% to 522% higher for Protonix; and 1,066% to 1,229% higher for Zocor (20 mg). Read the CMS press release.
U.S. hospitals posted substantial quality gains last year, according to an annual report from the federal Agency for Healthcare Research and Quality. Based on reviews of 42 core quality measures, quality of care improved by 7.8% in hospitals, compared with an overall quality increase of 3.1% in the U.S. healthcare system.
Specific areas of hospital improvement include care for heart attack patients, up 15%; care for pneumonia patients, up 11.7%; and prevention of postoperative complications, up 7.3%. AHRQ officials attributed hospitals’ quality improvements to quality improvement organizations that contract with CMS to work with hospitals to provide appropriate and timely care. Despite these improvements, AHRQ’s 2006 National Healthcare Disparities Report shows that Americans, particularly blacks, Hispanics, and the poor, aren’t receiving adequate screenings to prevent cancer, heart disease, diabetes, and other health problems.
New guidance from CMS will help hospitals comply with the Health Insurance Portability and Accountability Act’s security rules that apply to remotely accessed electronic health information. CMS said concern has grown around the use of laptop, handheld, and home-based computers, as well as wireless access points, e-mail, and smart phones because of the potential for security breaches.
CMS’s guidance offers examples of appropriate use of these tools. They include physicians’ use of a hand-held computer to access electronic prescription information while away from the office, or a home health nurse using a laptop or handheld computer to access patient records during a home health visit. Hospitals and other HIPAA-covered facilities should emphasize risk management strategies and staff training to safeguard electronic information, according to the CMS.
Community hospitals in New Hampshire are trying to level the playing field for uninsured patients by offering them a 15% discount on medically necessary hospital charges. The new Hospital Access Plus program, in which 25 community hospitals are participating voluntarily, reduces the higher hospital bills uninsured patients often pay because they don’t benefit from lower rates that insurance companies negotiate.
“Our hospitals agree that the current system of billing in health care is outdated,” said Mike Hill, president of the New Hampshire Hospital Association, to which the participating hospitals belong. The 15% discount is automatically applied to all accounts that do not meet criteria for federal, state, or community-based financial assistance. Physician professional services during hospitalization and charges from other providers for nonhospital services are not included in the discount program. Read the press release.
Last year, 17 states increased access to health coverage through expansions or changes in Medicaid and the State Children’s Health Insurance Program, according to a survey from the Kaiser Commission on Medicaid and the Uninsured. In fact, the survey found that for the first time in four years, none of the states cut income eligibility in either program.
However, even though Hawaii, Illinois, and Massachusetts launched major expansions to cover children, and other states took more incremental approaches, the survey signaled a warning. Progress on covering the uninsured could be undercut by provisions of the Deficit Reduction Act of 2005 that established proof-of-citizenship requirements for Medicaid applicants. The survey reported that, since the law took effect in July 2006, several states, including Iowa, Louisiana, New Hampshire, Virginia, and Wisconsin, have reported declining enrollments and processing backlogs in their Medicaid programs. State health officials say it is U.S. citizens and legal immigrants--not undocumented immigrants, for whom the law was intended--who are falling off Medicaid rolls.
“There is no evidence that the [enrollment] decline is due to undocumented aliens leaving the program. Rather, we believe that these new requirements are keeping otherwise eligible citizens from receiving Medicaid because they cannot provide the documents required to prove their citizenship or identity,” Anita Smith, chief of the Bureau of Medical Supports in the Iowa Department of Human Services, said in the survey. Jeff Nelligan, a CMS spokesman, told the Associated Press that the agency has given states flexibility to help applicants establish citizenship and is not aware of substantial enrollment barriers. Read the report.
At a Jan. 11 question-and-answer phone-in session to elaborate on laws enacted as part of the Deficit Reduction Act, CMS made several clarifications. Callers were informed that the law does not require providers to hold classes or conduct training for employees, contractors, and agents to educate them about fraud and abuse. The law, which was effective Jan. 1, simply requires providers to create and distribute to those individuals a policy that addresses detection of fraud and abuse and outlines their rights as whistleblowers. Many of the questions fielded during the session were about how providers should interpret “contractors and agents” and how the $5 million Medicaid threshold was defined. In answering, CMS emphasized that responses were informational only and should not be constituted as official policy.
In answer to specific questions about the $5 million threshold, CMS said that the law would apply to a healthcare system with three hospitals, for example--even if the hospitals did not individually receive $5 million in Medicaid reimbursement--as long as the aggregate amount to the health system totaled $5 million. CMS also said that the $5 million is calculated on the amount paid to a provider, not the amount billed.
Defining a contractual relationship was less clear-cut, however. Billing and coding vendors are contractors, said CMS, as are suppliers who provide any healthcare product or services used by Medicaid patients. But less clear was whether members of a hospital medical staff are considered contractors. CMS also couldn’t immediately answer whether health plans were required to send and enforce policies to thousands of contracted hospitals and physicians, or how contractors were supposed to comply with multiple sets of policies from their customers. One caller asked why, 11 days after the law took effect, there are so few answers on how to comply with the law. CMS answered that every provider is responsible for following the law in order to receive Medicaid reimbursement but that the agency will issue final guidance, taking the call-in questions into consideration.
Fitch Ratings predicts a stable outlook for not-for-profit hospitals and health systems for 2007. Similar to 2006, Fitch expects slight improvement in the operating performance of its rated hospitals and continued improvement in the ratio of downgrades to upgrades in 2007. Revenue growth from managed care and Medicare should adequately offset risks, including rising capital needs, inconsistent volume trends, rising expenses, increased competition from physicians and specialty hospitals, and project management and construction costs, according to Fitch’s 2007 outlook report. Best management practices that hospitals have implemented over the past few years should yield increased revenues and better efficiencies, but government scrutiny of the not-for-profit sector, ever-rising numbers of uninsured, and growing consumerism could reverse this year’s positive trend by 2008.
Physician alignment strategies present opportunities for hospitals to solidify their competitive positions, according to Fitch. Quality and patient safety initiatives being implemented will more than likely pay dividends over the medium to long term as pay-for-performance contracts and consumerism gain momentum and as investments in IT related to quality begin to drive efficiencies and reduce errors. Although volume trends will likely remain volatile over the short term, the aging baby-boomer population should contribute to growth in volume in most markets over the long term. Rising copays and deductibles, an expected increase in high-deductible health plans, and the growing number of self-pay patients could contribute to increases in bad debt expense offset by a push to separate charity care from actual bad debt. See the slide presentation.
The Medicare Payment Advisory Commission has voted unanimously to recommend giving hospitals a full market basket increase in FY08 payments for inpatient and outpatient care. CQ HealthBeat has reported that the projected increase is 3.1%.
The panel also recommended higher payments of 1% to 2% to hospitals that improve their care or meet certain quality standards on widely used performance measures. The commission stated, “Congress should increase payment rates for the acute inpatient and outpatient prospective payment system in 2008 by the projected rate of increase in the hospital market basket index, concurrent with implementation of a quality incentive payment program.”
The quality improvement payments would come from adopting a second MedPAC recommendation to trim the add-on payment made to teaching hospitals, known as the adjustment for “indirect medical education” expenses. The IME add-on would be cut from 5.5% to 4.5%. Resulting savings could fund 1% bonus payments for quality, MedPAC staff said.
Recent news from CMS that healthcare spending has slowed isn’t as rosy as it seems, says the Commonwealth Fund. “Any celebration is premature,” fund president Karen Davis said in a statement. A data brief from the fund’s Commission on a High Performance Health System notes that even though 2005’s 6.9% healthcare spending increase is the lowest since 1999, it still outpaces inflation and wage growth for the average U.S. worker.
The commission suggests several strategies to improve value and efficiency in the U.S. healthcare system. They include more open reporting on costs and quality of care, rewarding health providers for quality and efficiency, and expanding the use of IT.
The federal government will post online comparison data on hospitals’ heart attack and heart-failure death rates beginning in June, USA Today reports. Consumers can use the 2005-06 data to compare hospitals’ 30-day death rates with national Medicare death rates of 17.8% for heart attack and 11.6% for heart failure. Hospitals’ specific death rates will not be posted; rather, the site will state only how a hospital performs in relation to the national average.
Experts say 30-day death rates are a more reliable indicator of hospital performance than inpatient deaths an
