More than 60% of U.S. hospitals have made significant enough investments in IT to begin seeing reductions in operating costs, according to a PricewaterhouseCoopers report. After analyzing performance data from nearly 2,000 U.S. hospitals, the report finds that IT investment must reach a tipping point before cost-reducing performance improvements occur, and until then, hospitals experience increased operating costs with little near-term financial benefit. However, PwC also found that hospitals are experiencing less dramatic return on IT investments than other industries that have realized productivity gains equal to five times the cost of IT investment. And some hospitals may not experience productivity increases at all if they are starting from a low point of IT investment. (Download the report.)
Overall, the analysis found that hospitals making high levels of IT investments perform at a higher level of efficiency than hospitals with low levels of such investments. But hospitals with the lowest levels of investment in IT have lower overall operating costs than hospitals with moderate levels of IT investment. Hospitals that are low on PwC's IT capital index--which determines the capital value of hospitals’ healthcare IT application mix--experience increases in total operating expenses as they bring more IT online. Eventually costs leveled off, regardless of the added costs of additional IT capital, as IT applications displace costs elsewhere in the organization, such as improved quality. To fully realize the value from IT investments, organizations should also redesign clinical and business processes.
An additional 1 million to 2 million women per year who are at high risk for breast cancer should receive breast magnetic resonance imaging, according to new guidelines by the American Cancer Society, yet radiologists say they currently cannot meet the new demand, reports The New York Times. And a study published in the current issue of The New England Journal of Medicine advises that women who are newly diagnosed with breast cancer--about 180,000 cases this year--should also receive breast MRI, which was shown to detect tiny tumors in the other breast in 3% of women studied. The new guidelines from the American Cancer Society advise that, starting at age 30, women who have a 20% or higher risk of developing breast cancer get MRI once a year. And although surgeons currently differ on which new breast cancer patients should receive MRI to detect additional tumors, younger women with dense breast tissue will likely be the best candidates, say experts.
The costs associated with the increased use of breast MRI could be great, said the Times article. With breast MRI running at nearly 10 times the cost of mammography, 1 million scans would equal at least $1 billion.
The 1.2 million people who receive angioplasties each year on a nonemergency basis at an average cost of $40,000 per procedure may be better off taking medications to unblock their arteries and treat chest pain, according to a study report that appeared in the online version of The New England Journal of Medicine. The study of more than 2,000 patients with significant artery blockages found that patients who had angioplasty had rates of death, heart attack, and hospitalizations similar to those of patients treated with drugs, reports the Associated Press. And after five years, both groups were equally free of chest pain. Medications produced outcomes as good as those produced by angioplasty because they unclog all arteries, whereas angioplasty clears blockages on only one artery at a time. Also, angioplasty for nonemergency heart patients doesn’t eliminate the types of artery blockages that typically lead to a heart attack. Angioplasty is, however, the treatment of choice for patients having a heart attack.
In an editorial accompanying the article, Judith Hochman, MD, of the New York University School of Medicine wrote that the study’s results “should lead to changes in the treatment of patients with stable coronary artery disease, with expected substantial healthcare savings.”
A 65-year-old couple retiring in 2007 will need approximately $215,000 to cover medical costs in retirement, according to Fidelity Investments’ latest healthcare cost estimate. This figure is a 7.5% increase over the 2006 estimate of $200,000. The retiree healthcare cost estimate is calculated annually by Fidelity Investments. Since the estimate first was computed in 2002, the number has risen a total of 34%, with an average annual increase of 6.1%.
The 2007 estimate assumes individuals do not have employer-sponsored retiree healthcare coverage and includes expenses associated with Medicare Part B and D premiums, Medicare cost-sharing provisions, and prescription drug out-of-pocket costs. It does not include other health-related expenses, such as over-the-counter medications, most dental services, and long-term care.
Fidelity also found that a 65-year-old worker today, who is earning $60,000 and decides to retire at the end of the year, should expect that 50% of his or her pre-tax Social Security benefit will be used to pay for personal healthcare expenses in the next 16 to 18 years.
http://personal.fidelity.com/myfidelity/InsideFidelity/index_NewsCenter.shtml
As of March 5, Fairview Health Services in Minneapolis has been publicly posting detailed quality and safety performance data on its web site, and the Texas Hospital Association has launched Texas PricePoint, a web site that allows consumers to compare charge data on the most common inpatient services at Texas hospitals.
Consumers can access Fairview’s progress on internal measures addressing hand hygiene, medication reconciliation, patient identification, and patient fall rates. The web site also includes Fairview’s reported incidences of 27 types of serious events. Users can click on diseases and conditions and view charts showing what percentage of patients at Fairview hospitals receive appropriate care measures. The site also contains data pulled from Fairview’s patient satisfaction survey results, and charts show how well Fairview patients think they are involved in their care plans.
With Texas PricePoint, users can request information on a single hospital or from several for comparisons. The web site--which uses hospital-supplied data from the Texas Health Care Information Collection and the annual survey of hospitals, as well as the Centers for Medicare & Medicaid Services’ Hospital Compare web site and The Joint Commission--is operated under contract with WHA Information Center, a subsidiary of the Wisconsin Hospital Association. States with similar hospital charge transparency web sites include Georgia, Iowa, New Hampshire, New Mexico, Oregon, Utah, Virginia, Washington, and Wisconsin.
While 70% of U.S. adults indicate that they are generally satisfied with how their personal health information is used, about one-quarter has serious reservations about the confidentiality and security of their health data, according to a Harris Interactive survey of 2,337 U.S. adults. One in six Americans say they withhold information from their health providers due to worries about how the medical data might be disclosed.
Half the respondents also believe that patients have lost control over how their medical records are used by organizations such as life insurers, employers, and government health agencies. The survey also found a strong correlation between health conditions and privacy concerns. Among adults who indicate that their health is either only fair or poor, significantly more have concerns about the confidentiality and security of their health information. “While these results continue to document majority concerns about how confidentiality and security will be handled in electronic health records programs, they also show that about a two-thirds majority are ready to accept the potential benefits of such EHR systems if solid privacy and security rules are applied,” said Alan Westin, PhD, a health privacy expert at Columbia University. “However, about one quarter of the public remains skeptical and worried about such systemic computerization, and it will take highly robust and transparent new privacy and security programs to overcome these fears.”
Blue Cross of California has been fined $1 million by the California Department of Managed Health Care for routinely rescinding health insurance policies, including those of pregnant women and the chronically ill, in violation of California law. The investigation of Blue Cross was unprecedented, and the DMHC said it will conduct similar investigations of other health plans beginning next month, reports the Los Angeles Times. “We are now trying to clean up an industry practice,” Cindy Ehnes, director of the DMHC, told the Times. The investigation of 90 policies cancelled by Blue Cross found that in all cases, Blue Cross did not prove that an applicant willfully misrepresented his or her medical history before coverage was rescinded. And in 39 of 90 cases, there was no evidence that Blue Cross conducted a complete pre-enrollment investigation of the applicant’s medical history or conformed to its own underwriting policies before issuing health coverage. Blue Cross’ parent company WellPoint Inc disagreed with the findings, telling the Times, “The vast majority of Blue Cross’ rescissions are unquestionably proper under any criteria.” Read the investigation report.
Standard & Poor’s predicts that a credit gap will continue to widen between not-for-profit hospitals that rank at the top and at the bottom in performance. Hospitals with top-tier credits have greater liquidity to increase capital spending on construction projects and IT and are in a better position to benefit from the rise of consumerism, quality measurement, and pay-for-performance initiatives, according to the commentary. Institutions with stronger credit also will continue to have more leverage in gaining favorable reimbursement and will be able to “counteract competition with medical staff.” And greater credit strength also allows for better access to lower-cost capital.
“The credit gap falls heavily on smaller, stand-alone providers in urban or semi-urban settings--many of which have unfavorable demographics and feature weak payer mixes and a low case mix,” said the report. And unless these organizations take steps to improve their long-term viability now, they will be at risk for mergers, closures, and bankruptcies. “Barring a fundamental restructuring of the healthcare system through reform of the insurance system or payment structures, the credit gap is likely to continue to widen,” concludes the commentary. “And if the general environment becomes less favorable, as is widely expected over the next few years, beginning perhaps as early as 2009, a sizable shakeout in the industry is likely to occur as those players that are just marginal now will find it impossible to survive in a more difficult environment.” For more information, call 212-438-7963.
A new study published in Archives of Surgery “validates a key assumption” in giving consumers hospital performance data to help them make decisions about which hospitals to choose--but 31% of Medicare surgical patients said they left the decision to their physicians. The study surveyed 510 Medicare patients who had undergone high-risk operations for abdominal aneurysm repair, heart value replacement surgery, or resections for bladder, lung, or stomach cancer. Twenty-seven percent of Medicare patients said they or their families were the primary decision makers for inpatient care, while 42% said they made the decision with their physicians. Physicians were more likely to be the primary decision maker for male patients, those in poor to fair health, and for cardiovascular surgery.
The study also found that 289 patients had gathered information about the hospitals from other sources besides their physicians, reports The Washington Post. The researchers speculate that physicians made the decisions for nearly a third of patients “because a paternalistic physician (or healthcare system) imposed a decision on them” or they were unable to get the information to help them make the decision themselves.
The Centers for Medicare and Medicaid Services commissioned two studies to help refine the methodologies for calculating cost-based and severity-adjusted diagnosis-related groups for the acute inpatient prospective payment system. The report by the Research Triangle Institute found that charge compression--smaller markups on high-priced items and larger markups on low-priced items--introduces bias to cost-based DRG weights, which can be reduced by refining cost-to-charge ratios. The RAND Corporation evaluated five systems for classifying discharges into severity-adjusted DRGs and found that “the actual impacts under any of the systems will depend on hospital efforts to improve coding practices in response to the specific incentives of the selected system.” CMS will have to “develop an equitable policy for addressing case mix increases attributable to coding improvement,” said the preliminary report. RAND will release its final report in September 2007.
The Census Bureau has issued revised figures on health insurance coverage, showing that more Americans have health insurance coverage than previously reported. The revised estimates show that in 2005, 44.8 million people--15.3% of the population--were without health insurance, which is about 1.8 million fewer than the Census Bureau reported in August 2006. The original 2005 estimate was 46.6 million, or about 15.9% of the population.
Conversely, an estimated 249 million Americans had coverage, up from the 247.3 million reported in August. The Census Bureau discovered the need for a revision during a conversion to a more accurate operating system for its population survey. In improving the quality and timeliness of the data, the Census Bureau noted that, in a small percentage of cases, some residents in a household were tabulated as “not covered” by insurance when they had in fact reported coverage. Read the Census Bureau statement.
Democratic presidential candidates are united in promising Americans universal healthcare coverage, but their views on how to pay for it differ significantly, reports The Washington Post. At a forum sponsored by the Service Employees International Union and the Center for American Progress Action Fund on Saturday in Las Vegas, the candidates spoke on how they would achieve healthcare reform. John Edwards, a former U.S. senator from North Carolina, had the only explicit proposal for universal coverage, stating that he would raise the $90 billion to $120 billion a year it would cost by increasing the taxes of those earning more than $200,000 a year. New Mexico Gov. Bill Richardson, however, said his plan would require no new revenue because he would fund universal coverage by ending the Iraq war. Sen. Hillary Rodham Clinton, D-N.Y., said only that her reform would fix a broken healthcare system, end “insurance discrimination,” and focus on insurance companies and others who “make out really well.” Most of the candidates said they would build on the current employer-based insurance system, but Rep. Dennis Kucinich, D-Ohio, said he would push for a single-payer system.
HealthSouth Corporation announced an agreement to sell its surgery division to TPG for approximately $945 million. The purchase price consists of cash consideration of approximately $920 million and an equity interest whereby HealthSouth has the opportunity to participate in the future success of the newly formed company. This future consideration is estimated to be worth $25 million to $30 million, assuming a five-year horizon. HealthSouth’s surgery division comprises 139 outpatient surgery centers and three surgical hospitals in 35 states. The new company will be among the nation’s largest providers of outpatient surgical services.
“Today’s announcement marks a major milestone in the strategic repositioning of HealthSouth as a post-acute healthcare provider, focusing on inpatient rehabilitative services,” said Jay Grinney, HealthSouth president and CEO in a statement. “The proceeds from this transaction will be used to pay down a significant portion of our long-term debt, thereby strengthening our balance sheet and positioning us to grow our core business.” Certain members of HealthSouth’s senior management team, including Mike Snow, COO, and Joe Clark, president of the surgery division, will be leaving HealthSouth to join the newly formed company, which is expected to remain headquartered in Birmingham, Ala.
Eighty-five percent of U.S. adults ranked the rising cost of health care a greater concern than the war in Iraq (79%), the increasing cost of fuel (80%), and the threat of global warming (61%), according to a survey conducted by Harris Interactive for the American Society for Quality. These findings contrast with results of a recent New York Times/CBS poll that ranked Iraq as America’s top overall issue. The issue of universal healthcare coverage wins even stronger approval in the ASQ survey, which found that 79% of adults believe universal coverage would improve healthcare quality. The survey also found that women (83%) are more likely than men (75%) to think universal healthcare coverage would improve the quality of health care over the next five years. This could correlate to the finding that women are more likely than men to delay medical care because of expense. Sixty-eight percent of adults indicated that healthcare quality would improve over the next five years if individuals became less dependent on health insurance companies for the cost of their own health care.
Some hospitals are reporting that not all their payers apparently will be ready to process claims using the National Provider Identifier by the compliance date of May 23, 2007. The Medicaid offices in several states, including Idaho, Illinois, Maryland, New Hampshire, and New York, have requested providers to continue to send in the current provider numbers after May 23, and some are asking providers to continue using the current UB-92 and CMS 1500 forms. Because a list of those who have identified their inability to meet the May 23 deadline is not available, hospitals are being urged to check with all their payers as to whether they will be able to process claims using the NPI and the UB-04. Read the Feb. 26 HFMA News posting.
Interviews with 45 people with medical debt reveal that having private health insurance does not always protect against significant out-of-pocket medical bills, according to a report by The Access Project and Brandeis University. Seventy percent of those interviewed had employer-sponsored insurance, and only half had a choice of plans. Two-thirds of respondents said premiums, deductibles, copays, or co-insurance contributed to their medical debt, and more than a third said they went into debt paying for uncovered services. Families with special-need children also reported that many services their children needed were not reimbursed by their insurance plans. Nearly half said that medical debt negatively affected their health as they curtailed necessary medical treatment, and over one third used all their savings to pay medical bills or stopped saving for retirement to get themselves out of medical debt.
The report recommends that insurance companies be required to provide consumers with clear information on services that are covered and that states should require insurers to file requests for premium increases and hold public hearings on the requests. It also advises setting standards on comprehensive, affordable insurance and developing private/public partnerships to share the costs of high-quality coverage.
Administration costs associated with healthcare claims and billing account for nearly one out of every three dollars that patients spend on health care, according to a survey of 200 executives from hospitals and insurance companies commissioned by The PNC Financial Services Group, Inc. In contrast, 76% of the 1,000 consumers surveyed said they think that healthcare administration should account for just 10% or less of total healthcare costs, with a large majority indicating they would be “highly upset” if those administrative costs were as high as 30%. Seventy-nine percent said they would like to see an itemization of the portion of their healthcare bills that goes to administration versus clinical care. Both hospital and insurance executives said that the healthcare transparency movement will include scrutiny of administrative overhead costs.
When asked how much could be saved annually if they had a more efficient claims, billing, and payment process, one-third of hospital and health plan executives said their organizations could save at least $1 million a year. Read the news release.
The Centers for Medicare and Medicaid Services has issued a final rule setting forth the requirements that transplant centers must meet to participate in the Medicare program. The final rule, which consolidates all transplant center requirements in one regulation, outlines comprehensive conditions of Medicare participation for transplant programs that include clinical experience, resources, and commitment of the transplant program. It also tightens oversight of transplant centers by improving coordination between CMS, state survey agencies, the Health Resources and Services Administration, the Organ Procurement and Transplantation Network, and the Scientific Registry of Transplant Recipients.
All transplant centers that continue to participate in Medicare, including kidney transplant centers, are required to submit a request for initial approval. Once approved by Medicare, transplant centers are eligible for re-approval every three years. Transplant centers with current Medicare approval that have applied for initial approval within 180 days from the effective date of the final rule may continue to provide transplant services and receive payment from Medicare until CMS makes a decision on the transplant center’s request for approval. Read the news release.
CMS has issued additional guidance to state Medicaid directors on implementing the provision of the Deficit Reduction Act that requires providers that receive more than $5 million annually in Medicaid payments to develop and disseminate written policies for employees and contractors on how to detect and report Medicaid fraud. The guidance includes answers to 71 frequently asked questions about the federal False Claims Act, including how entities within a health system are evaluated regarding the $5 million annual threshold, how the threshold amount is calculated, and clarification of the definition of a contractor.
Thirty-five percent of seniors--including 62% of low-income seniors--enrolled in Medicare Advantage say they would skip some of the healthcare treatments they currently receive if the option of choosing a Medicare health plan is taken away, while three-fourths of physicians believe that seniors will be harmed if Congress cuts the Medicare Advantage program, according to two new surveys released by America’s Health Insurance Plans. Forty-two percent of seniors say they would pay higher out-of-pocket costs if the option of choosing a Medicare Advantage plan was taken away, and 90% of beneficiaries are satisfied with their Medicare Advantage coverage overall, up from 84% in AHIP’s 2003 survey. In addition, the majority of physicians surveyed said Congress should cut other programs or raise taxes rather than cut Medicare Advantage. Read the press release.
An AFL-CIO affiliate has launched a web site to “unmask the real players behind our nation’s broken healthcare system and to bring healthcare consumers together as a powerful force for change,” according to a statement by the labor union. Visitors to the Health Care Hustle site at www.workingamerica.org/healthcarehustle/ are invited to “vent online about their own healthcare horror stories” through April. They are also urged to send a message to the special interest they hold most responsible “for the sorry state of the system: Big Pharma, the Insurance Industry, Greedy Corporations, or Bush & Co.” Working America, the community affiliate of the AFL-CIO for workers who do not have a union, will tally the messages, with each message counting as one vote, and will target the winner in a campaign intended to get “powerful interests who don’t want to pay their fair share for real reform” to change their ways.
All babies born in the United States to mothers receiving emergency Medicaid services will automatically be covered by Medicaid for up to a year after their birth if certain conditions are met, announced the Centers for Medicare and Medicaid Services. CMS said it will modify its current policy to reflect that change in an interim final rule to be issued shortly. Any newborn whose mother files an application and is determined eligible for emergency Medicaid for the delivery could be deemed eligible for their first year of life. Documentation of eligibility would be required at redetermination in the same manner as for all deemed newborns. Before the policy clarification, babies born to illegal immigrants were not covered until the state fulfilled documentation requirements to establish the baby’s citizenship. Leslie V. Norwalk, Acting Administrator of CMS, said, “We intend to modify the documentation requirements to put all babies born in the United States whose deliveries are covered by Medicaid on an equal footing.”
Washington Gov. Chris Gregoire signed into law a measure to provide health insurance coverage to an additional 38,000 of the state’s low-income children by expanding access to health insurance for children who live at or below 250% of the federal poverty level. Beginning in 2009, access will be expanded to include children who live at 300% of the federal poverty level. The bill will make health insurance easier to get with one standard application and targeted outreach to inform parents and find children who are eligible. “This bill is not just about getting children insurance,” said Gregoire. “We are making sure children have a medical home and that we tie our dollars to performance measures and pay for quality care.” Gregoire has said she wants to provide health insurance access to all Washington children by 2010.
Patients undergoing procedures in a hospital-based outpatient surgery center are more than 30 times more likely to be hospitalized if they have four or more risk factors for complications and adverse outcomes, according to a new study published in Archives of Surgery. The researchers assigned one point to the following risk factors: being 65 or older, having a surgery time of two-plus hours, cardiac diagnosis, peripheral vascular disease, cerebrovascular disease, malignancy, HIV seropositive, and having regional anesthesia, reports MedPage Today. Having a surgical procedure under general anesthesia was assigned two points. The researchers then calculated the likelihood that a patient having an outpatient surgical procedure would have to be admitted to the hospital based on the patient’s risk score. “This is not to suggest that patients with an outpatient surgery admission index of four or higher should universally undergo inpatient surgery,” the researchers wrote. “Rather, clinicians should consider performing surgery on these patients in a setting where there is additional medical support to treat acute adverse events and to permit rapid transfer to an inpatient hospital.”
Laws in two states requiring disclosure of pharmaceutical company payments to physicians do not provide the public with easy access to payment information and are of limited quality when accessed, according to a study in the March 21 issue of JAMA. Recent legislation in five states and the District of Columbia mandated state disclosure of payments made to physicians by pharmaceutical companies. In two of these states, Vermont and Minnesota, payment disclosures are publicly available. The authors found, however, that 61% of payments to physicians in Vermont were not reported because the pharmaceutical companies “designated them as trade secrets,” and 75% of disclosed payments did not identify the physicians. In Minnesota, only 25% of pharmaceutical companies reported the gifts they made to physicians in each of the three years studied.
The study also found that pharmaceutical companies made substantial numbers of payments of $100 or more to physicians. (The American Medical Association recommends that gifts--but not other payments--to physicians should benefit patients and should not exceed $100 in value.) In Vermont, 2,416 physicians received payments of more than $100, as did 6,238 physicians in Minnesota.
U.S. hospitals have significantly improved quality of care provided for heart attacks, heart failure, and pneumonia over the past four years, according to a new report from The Joint Commission, but room for improvement exists for most of the quality measures. The report details the performance of accredited hospitals against standardized national performance measures and the Joint Commission’s national patient safety goals and finds that hospitals are currently achieving 90% performance or higher for about half of the measures tracked since 2002. Hospitals are performing at less than 65% for two of these measures--providing pneumococcal screening and vaccination to patients admitted with pneumonia and providing discharge instructions to patients admitted with heart failure. The magnitude of improvement in the safety and quality of care provided ranged from 1.1% to 42.8% between 2002 and 2005, with performance improving the fastest on measures where the initial performance level was lowest.
Hospital performance also varied widely by state. For example, the statewide averages for providing discharge instructions to patients admitted with heart failure range from 33.5% to 89%. Read the report.
A new analysis of health reform bills in Congress prepared for the Commonwealth Fund Commission on a High Performance Health System shows that many current congressional healthcare proposals could significantly reduce the number of uninsured Americans and also decrease overall healthcare expenditures, including those for insurance administration and prescription drugs.
Rep. Pete Stark’s (D-Calif.) AmeriCare proposal, which would open the Medicare program to everyone, would cover nearly all of the uninsured, as would Sen. Ron Wyden’s (D-Ore.) Healthy Americans Act, which would help people purchase coverage through large regional insurance exchanges. President Bush’s plan would cover one in five uninsured Americans. The Stark proposal would cost the federal government $154.5 billion in 2007 but reduce overall health spending by $60.7 billion because of savings in insurance administration and prescription drugs. The Wyden proposal would increase federal spending by $24.3 billion in 2007 and reduce overall health spending by $4.5 billion, partly through insurance administration savings. Bush’s plan would cost the federal government $70.4 billion in 2007 and reduce health system spending by $11.7 billion as people would reduce their use of health services.
The 8.3 million Medicare beneficiaries enrolled in a private Medicare Advantage plan saw a dramatic increase in the number of private fee-for-service plan choices they were offered, reports a Kaiser Family Foundation study. Enrollment in private FFS Medicare plans grew ninefold from March 2005 to November 2006 and accounted for 39% of the growth of Medicare Advantage plans. Fifty-two percent of Medicare beneficiaries have a choice of six or more private FFS plans and 86% have at least three choices. And for the first time this year, Medicare Advantage enrollees were offered a medical savings account with a high deductible and savings account to pay medical expenses. Medical Advantage enrollment grew 37% from 2005 to 2006, with HMO enrollment growing 20% and PPO enrollment growing by 143%.
In resolving a class-action lawsuit, Minnesota health systems Allina Hospitals and Clinics and Fairview Health Services are notifying uninsured patients that they are entitled to a 25% discount on their unpaid bills or credit vouchers for future medical services if they’ve already paid their bills. In February, the Hennepin County District Court ruled that a lawsuit against Fairview and Allina could proceed as a class action for the purpose of settlement. The lawsuit alleged that Allina and Fairview charged uninsured patients an “unreasonable amount in comparison with the amount charged to other payers, such as insurance companies” from February 1999 to August 2005. The two health systems estimate that 200,000 patient accounts may be affected by the settlement, reports the St. Paul Pioneer Press. A hearing to finalize the settlement is scheduled for May 31 in Hennepin County District Court. “We’re pleased to bring closure to this,” Fairview spokesman Ryan Davenport told the Press. “We think it’s the right thing to do for our patients.”
Raritan Bay Medical Center, headquartered in Perth Amboy, N.J., has agreed to pay the United States $7.5 million to settle allegations that it defrauded the federal Medicare program, the Justice Department announced. The government alleged that, between January 1998 and August 2003, Raritan Bay purposefully inflated charges for inpatient and outpatient care to make these cases appear more costly than they actually were, and thereby obtained outlier payments from Medicare that it was not entitled to receive.
The civil settlement agreement resolves allegations against Raritan Bay that were filed in three separate federal lawsuits brought by whistleblowers under the federal False Claims Act. As part of the settlement, the hospital entered into a corporate integrity agreement with the Department of Health and Human Services’ Office of Inspector General, which contains measures to ensure compliance with Medicare regulations and policies in the future. The New Jersey Star-Ledger published a statement from Raritan Bay officials that said “during the period in question,” the hospital “believed its billing practices in connection with the Medicare outlier payment system were in accordance with existing Medicare regulations.”
Results of the 2007 National Resident Matching Program show that the number of medical students (2,680) choosing internal medicine residencies stayed about the same compared with 2006. The American College of Physicians has cautioned that unless there is an increase in the number of medical students choosing internal medicine careers, there will not be enough internists to care for an aging population, which will result in lower-quality care, diminished access to care, higher costs, and decreased patient satisfaction. The ACP has called for a redesign of training in internal medicine to prepare physicians for a rapidly evolving system of healthcare delivery and to fundamentally change the way primary care is organized, delivered, financed, and valued.
Simply being a major teaching hospital is no longer enough of a draw for patients, who are now also looking for topnotch customer service and patient amenities, reports the Chicago Tribune. As several large medical centers in Chicago take part in the hospital building boom occurring throughout the country, they are intent on altering the patient experience. Children’s Memorial Hospital, which will break ground next year for an $800-million facility, is conducting focus groups of children, asking their preferences for computers, decor, and food, and designing rooms to bring in more natural light. The new $450-million Prentice Women’s Hospital will have a “significant art collection” and round-the-clock room service. At Rush University Medical Center, which is spending $810 million to create new facilities, there is a much greater focus on the environment with natural lighting, bamboo flooring, and nontoxic materials. “About 13 years ago hospitals tried to look more like hotels, but the finishes and materials didn’t really hold up,” Joseph DeVoss, Rush’s assistant vice president for capital transformation, told the Tribune. “Now we know that patients and even staff thrive in better environments.”
The gap in life expectancy between whites and blacks in America still exists but has narrowed substantially as a result of a decline in certain diseases and a decrease in homicides and accidents, according to a McGill University study published in the March 21 issue of JAMA. The study found that the gap declined to an historic low of 5.3 years in 2003 from 7.1 years in 1993, bringing the life expectancy of U.S. blacks to 72.7 years, compared with 78 years for whites. Specifically, a decrease in mortality among black males age 15 to 49 from homicide, HIV/AIDS, and accidental injuries, as well as a decrease in mortality among black females due to heart disease, were major reasons for the recent decline in the gap. A lack of improvement in death rates of older black men from heart disease kept the gap from narrowing even further.
Despite improvements, however, the fact that a substantial life expectancy gap still exists between the two groups will require concerted intervention from public health officials and healthcare providers, concludes the study. “The crucial thing here is that the black-white gap is not fixed and it’s not a mystery,” said lead researcher Sam Harper, a postdoctoral fellow in McGill’s department of epidemiology, biostatistics, and occupational health. “It can change because of improvements in a small number of causes of death. This means the remaining gap can be addressed through greater public health efforts and improvements in health care.” Read the news release.
A large majority of emergency Medicaid expenditures are for childbirth and complications of pregnancy for patients who are undocumented immigrants, although spending for undocumented elderly and disabled patients is increasing at a faster rate, according to a study in the March 14 issue of JAMA.
The researchers, who analyzed administrative claims data related to the emergency Medicaid program in North Carolina from 2001 to 2004, found that 99% of the patients were undocumented, 93% were Hispanic, 95% were female, and 89% were in the 18-to-40 age group. Approximately 82% of emergency Medicaid spending in 2004 was for childbirth and complications of pregnancy, and these accounted for 91% of hospitalizations. Injury and poisoning accounted for approximately one-third of the remaining spending. Although spending for pregnant women increased by 22% during the four-year period, spending increased by 70% for families with dependent children, 82% for disabled patients, and 98% for elderly patients.
“Emergency Medicaid is predominantly a program for childbirth coverage, although use and spending are shifting toward nonpregnant adults, particularly those who are elderly and disabled,” write the authors. “Increased access to comprehensive contraceptive and prenatal care, injury prevention initiatives, preventive care, and chronic disease management may make better use of the public healthcare dollar by improving the health status of this population and alleviating demand for costly emergency care.” Read the press release.
Forty percent of larger companies now offer or plan to offer a health savings account to employees, and 26% offer or plan to offer a health reimbursement account, according to an annual survey of 573 large companies conducted by Watson Wyatt Worldwide and the National Business Group on Health. However, employee enrollment in consumer-directed health plans remains low at 8%, an increase of only one percentage point from 2006. But employers are realizing lower healthcare costs with broader participation in CDHPs. Employers with 10% or more of their covered population in a CDHP are holding healthcare cost increases to a lower level--6.5% on average. Some employers are also driving enrollment by offering CDHPs as their only option. Currently, 5% of employers are offering CDHPs on a total replacement basis, and another 4% will do so in 2008.
In addition, employers that implement CDHPs as part of a broader health improvement strategy have made greater inroads into controlling health cost increases. One-fourth of respondents experienced median healthcare cost increases of 2.5% in the past two years, compared with an 11% average for the poorest performers and an overall average of 8%.
In a hearing before the Senate Finance Committee last Wednesday, several healthcare experts weighed in on how Congress should chart a course for healthcare reform. Stuart Altman, PhD, dean of the Heller School for Social Policy and Management at Brandeis University, advised building health reform “on the current financing system as much as possible” or risking major opposition from “key players in the existing system.” But to continue relying on employer-based insurance, Altman recommended that the federal government underwrite the cost of care for the most expensive patients through reinsurance. Altman also said he felt it would be a “big mistake” to combine comprehensive coverage with legislation to reduce healthcare costs in the reform plan because there would be too many “negative forces” to overcome.
Richard Frank, PhD, vice chair of the Citizens’ Health Care Working Group, told the committee that, “While Americans recognize that healthcare costs are a major problem for businesses, industry, and government as well as families, many believe that the huge sums now being spent on health care should be enough to ensure access to quality care for everyone, if these resources were allocated more sensibly.” And if more revenues are needed, Frank said the majority of Americans were willing to pay more so that all Americans have health insurance. James Mongan, MD, president of Partners Healthcare, pointed to Massachusetts’ law mandating universal coverage as a starting point in a national reform effort. “Leaders in Massachusetts honestly faced up to the cost of expanding coverage and addressed the revenue issue from a perspective of shared responsibility--everybody pays something. Federal funds, new state funds, pre-existent insurer and provider taxes, new employer contributions, and mandated payments by individuals were all utilized.”
Emergency department visits related to the nonmedical use of pharmaceuticals, including prescription and over-the-counter drugs, increased 21% from 2004 to 2005, according to the Drug Abuse Warning Network, 2005: National Estimates of Drug-Related Emergency Department Visits, published by the Substance Abuse and Mental Health Services Administration. Visits related to illicit drug use or alcohol were unchanged for the same time period. Anti-anxiety drugs (up 19%), prescription pain relievers (up 24%), and methadone (up 29%) were among those drugs most frequently implicated in nonmedical use.
Of the more than 1.4 million ED visits associated with drug misuse or abuse recorded by DAWN in 2005, 31% involved illicit drugs only and 27% involved pharmaceuticals only. An additional 36% involved combinations of illicit drugs, alcohol, and/or pharmaceuticals. Overall, there were 108 million ED visits in U.S. hospitals during the year.
Medicare beneficiaries’ care is spread over so many physicians that determining which physician should qualify for additional payment is a moving target under current pay-for-performance (P4P) designs, according to a study by the Center for Studying Health System Change and Memorial Sloan-Kettering Cancer Center published in the March 15 New England Journal of Medicine. A Medicare patient seen by the typical physician was treated by seven different doctors in four different medical practices in a given year, the study found. And only about 35% of beneficiaries’ visits were with the physician held responsible for their care under the most common P4P methodology used to assign patients to physicians. Moreover, for 33% of beneficiaries, the assigned physician and practice changed from year to year. The study concluded that typically primary care physicians would be held accountable for 39% of the Medicare patients they treat and 62% of Medicare visits they bill, while medical specialists would be held accountable for 12% of the Medicare patients they treat and 20% of the total Medicare visits they bill.
Instead of using claims data to retrospectively assign patients to physicians, the authors suggest that Medicare consider prospectively assigning patients to physicians and practices to establish clearly which providers will be held accountable for coordinating patients’ care. “Prospective designation of the responsible providers, even if voluntary, implies some limitation of the freedom of both patients and physicians to choose the physicians with whom they work, but it would have the benefit of aligning physician, patient and payer expectations of care relationships,” the article concludes.
The Bush Administration disagrees with several recommendations of the Citizen’s Health Care Working Group, which was asked by Congress to determine what the American people want in health care, reports the Associated Press. In a letter to House Speaker Nancy Pelosi, D-Calif., Health and Human Services Secretary Mike Leavitt wrote that President Bush agrees with the intent of the recommendations but not how to achieve them. After surveying 6,500 people, the group said that Americans wanted guaranteed healthcare coverage and felt that a national commission should determine the particular health benefits all citizens should receive. Leavitt disagreed, saying, “A nationally determined set of core health benefits would place important decision making about a person’s health care in the control of federal appointees, rather than allowing the consumer to choose the benefits that best meet their needs.” Leavitt also said the administration found fault with the group’s approach “based on mandates and government intervention rather than an approach emphasizing consumer choice and options.”
About one in five heart attack patients report having financial barriers to healthcare services, and these patients are more likely to have a lower quality of life and increased rate of rehospitalization, according to a study in the March 14 issue of JAMA. Despite having health insurance, more than 16 million Americans avoid health care due to cost or have trouble affording their medications. The researchers followed 2,498 patients for a year after their heart attack and found that 18.1% reported that they avoided follow-up care because of cost and 12.9% said they did not take prescribed medication as instructed because of the cost. Of the individuals who reported financial barriers, 69% were insured. After one year, individuals who reported financial barriers to healthcare services had a 11.2% higher all-cause rehospitalization rate (those who couldn’t afford their medications had a 19.2% rehospitalization rate) and an 8% higher cardiac rehospitalization rate (16.4% for those not taking medication as prescribed).
The researchers said their findings could help “improve risk stratification of patients and to address structural issues in the healthcare system predisposing certain patients to worse outcomes. This study provides further support for improved needs assessment and discharge planning combined with a mechanism to facilitate implementation of discharge plans.” Read the news release.
Working parents who earn modest incomes are experiencing a dramatic erosion in employer-sponsored health insurance, according to a new analysis by the Robert Wood Johnson Foundation. Nationally, 47% of parents in families earning less than $40,000 a year are offered health insurance through their employer--a 9% drop since 1997. Meanwhile, offers of health insurance to parents in families earning $80,000 or more have held steady at about 78%. According to the analysis, 75% of the nearly 9 million uninsured children live with someone who works full time. And 64% live with adults who earn modest incomes.
The declining rate of employer-sponsored health insurance among modest-income parents reinforces the need for Congress to provide the funds for the State Children’s Health Insurance Program to “maintain coverage for all currently enrolled kids and the millions more who are eligible, but remain unenrolled,” said Risa Lavizzo-Mourey, MD, president and CEO of the Robert Wood Johnson Foundation. States with the highest percentage of uninsured children include Texas (20.3%), Florida (16.9%), New Mexico (16.6%), Nevada (16.4%), and Montana (16.2%). States with the lowest percentage of uninsured children are Vermont (5.6%), New Hampshire (6%), Michigan (6.1%), Hawaii (6.2%), Minnesota (6.5%), and Nebraska (6.5%).
More employers are substantially rewarding their workers for getting fit, managing chronic illnesses, and quitting smoking. The Los Angeles Times profiles several companies that have upped the ante for good health. At Ottawa Dental Laboratory outside Chicago, workers can earn such prizes as televisions, DVD players, and digital cameras for making documented improvements in their health. The company said its 110 workers filled 160 fewer drug prescriptions last year as a result of better health. At IBM, employees can earn up to $300 for healthy behavior, and Johnson & Johnson discounts employees’ health insurance premiums by $500 if they participate in a disease prevention program.
Other employers are getting workers to pay more attention to their health by penalizing them if they don’t. Safeway, for example, charges employees who smoke $758 more in annual premiums, and employees of Scotts Miracle-Gro Company are at risk of losing their jobs if they continue to smoke after participating in smoking cessation programs. Healthcare experts say it’s too early to tell whether providing employees with rich rewards to change their behaviors will work--or simply cost companies money. But they admit that employees are paying much more attention to reducing their risk of disease when they have the opportunity to earn cash or sought-after prizes.
Patients admitted to hospitals for ischemic stroke on weekends had a 14% higher risk of dying within seven days of admission compared with patients admitted during the week, according to a Canadian study published in Stroke: Journal of the American Heart Association. Of 26,676 stroke patients admitted to 606 hospitals from April 2003 to March 2004, 24.8% were admitted on Saturdays and Sundays. The stroke death rate was even greater when patients were admitted to a rural hospital versus an urban hospital and when the physician in charge was a general practitioner rather than a specialist. Patients who required care in the intensive care unit and those admitted to nonteaching hospitals also fared worse. Researchers said disparities in resources, expertise, and healthcare providers working during the weekend may explain the difference. They also speculate that the weekend effect may be even larger in countries that do not have socialized medicine as Canada does. Read the news release.
HealthSouth and a group of orthopaedic surgeons have agreed to pay more than $1 million to settle allegations that they violated the federal False Claims Act by submitting claims to Medicare based on referrals resulting from an improper financial relationship, announced the U.S. Attorney for the District of New Hampshire. Between 1996 and 2006, the HealthSouth Corporation operated a sports medicine and rehabilitation center in Portsmouth, N.H., in a building owned by Seacoast Trust, which also rented space to a group of orthopaedic surgeons who are partners in the trust. At issue was whether the rent that HealthSouth paid to Seacoast Trust exceeded fair market value and reflected the value of referrals that HealthSouth received from the partners in Seacoast Trust who practiced medicine. If the lease arrangement were improper, HealthSouth would have been prohibited from submitting claims to Medicare for physical therapy or occupational therapy services based on referrals from the orthopaedic surgeons. Without admitting any liability, the parties entered into settlement agreements with the United States, with HealthSouth paying $775,000 and Seacoast Trust and the three surgeons paying an additional $275,000. HealthSouth is no longer renting space in the building owned by Seacoast Trust. Read the news release.
Although new medical technology has been blamed for rising healthcare costs, it can also be deployed as “disruptive innovation,” making it possible for a nurse or medical assistant to deliver a medical service that once required the skill of a doctor. The cost of the procedure will be reduced and more people will have access to it, according to Clayton Christensen, a Harvard Business School professor. In an interview published in Health Affairs, Christensen says an increasing number of diseases can be precisely diagnosed, which allows lower-cost health personnel to provide “rules-based therapy.” He speculates that in 15 years, cancer will become a disease treated by rules.
Disruptive innovation won’t reduce the cost of treating chronic diseases such as lupus and diabetes as much as it will acute medical problems, said Christensen, although the trend toward making patients more responsible for managing their diseases will have some impact. Medically complex cases that aren’t standard aren’t ready for disruptive innovation yet, but Christensen notes that applying the rules of the Toyota production system in tertiary care hospitals that treat complex conditions could cut overhead costs by 65% and labor costs by 7%.
A new report by the Urban Institute for the Medicare Payment Advisory Commission examines the reasons that more than a third of hospital-based skilled nursing facility units have closed since the Medicare SNF prospective payment system was implemented in 1998. Financial losses played a large role in the hospitals that shut down SNF units. Costs exceeded Medicare payments, the nursing shortage required some hospitals to staff their units with agency nurses, and physicians who had easy access to hospital-based SNF patients tended to visit them more frequently and order more tests. The hospitals also said the units detracted from their mission of providing acute medical care and that they needed the space occupied by the unit for expanded acute care. Burdensome SNF surveys and certification requirements were also barriers to keeping the units open.
In contrast, hospitals who maintained their SNF units said that even though they suffered financial losses, the units were serving a broader goal of providing continuity of care, maintaining good relations with physicians, and providing training for healthcare professionals. “Financial pressures resulting from the PPS meant that hospitals had to carefully consider the relative importance of different goals,” states the report. “Whatever choices were made, however, do reflect their primary acute care mission.”
Hospitals in the Midwest are setting new national standards for clinical outcomes, patient safety, financial performance, efficiency, and growth in patient volume, according to the Solucient 100 Top Hospitals study, which identifies benchmark hospitals based on overall performance. More than half of the winning hospitals in the 2006 study are from the Midwest, and 30 of the 100 top hospitals facilities are in two states--Michigan and Ohio. When researchers evaluated hospital performance on a state-by-state basis, nine out of 12 Midwest states placed in the top two quintiles.
At the other end of the spectrum, nearly two-thirds of states in the South (10 out of 17) ranked in the lowest two quintiles. Six states were ranked in the top quintile in both 2004 and 2006 (Kentucky, North Dakota, Ohio, South Dakota, Washington state, and Wisconsin), while seven states remained in the bottom quintile in both studies (Alaska, Hawaii, Nevada, New Jersey, New York, South Carolina, and Wyoming). Three of the most populous states--California, New York, and Texas--placed in the two lowest quintiles in both studies.
Top hospital winners in the West and South achieved the lowest expenses in the nation, and the West and Midwest set the benchmarks for profitability. The study also found that the 100 top hospitals spent an average of 12% less per discharge than peer hospitals, median total profit margin was nearly three times the median of peer hospitals, and salaries and benefits were $3,200 more a year per full-time staff member. Read the news release.
The federal law that requires people applying for Medicaid or current Medicaid beneficiaries to show proof of U.S. citizenship has resulted in “tens of thousands” of people losing Medicaid coverage, reports The New York Times. States such as Florida, Iowa, Kansas, Louisiana, New Mexico, Ohio, and Virginia have documented a decline in enrollment coinciding with the federal requirement, which was enacted as part of the Deficit Reduction Act. “The largest adverse effect of this policy has been on people who are American citizens,” Kevin Concannon, director of the Department of Human Services in Iowa, told the Times. Other state Medicaid directors echoed that most of the people who have been denied Medicare coverage for lack of citizenship documentation have not been illegal immigrants. States are also reporting huge delays in enrolling people in Medicaid because of the additional paperwork needed to prove citizenship. U.S. Rep. Nathan Deal, R-Ga., one of the sponsors of the 2006 legislation, said through his chief of staff that the law is saving money and that he will attempt to have it applied to the State Children’s Health Insurance Program, said the Times.
Incorrect formatting of the revised Form CMS-1500 (08-05) has caused the Centers for Medicaid and Medicaid Services to delay the deadline for the form’s mandated use from April 1, 2007, to possibly June 1, 2007. The form, which was intended to accommodate the National Provider Identifier and replace Form CMS-1500 (12-90), is already in circulation without the correct specifications. CMS said it will continue to accept the previous Form CMS-1500 (12-90) until the revised form is corrected. In the meantime, contractors are being asked to return, not manually key, any Form CMS-1500 (08-05) not printed to specification. CMS said the correct version of CMS-1500 (08-05) can be identified as follows: “On properly formatted claim forms, there will be approximately a ¼-inch gap between the tip of the red arrow above the vertically stacked word “CARRIER” and the top edge of the paper. If the tip of the red arrow is touching or close to touching the top edge of the paper, then the form is not printed to specifications.” Read the news release.
Minorities are more likely to forgo hospice and decide to pursue aggressive medical care at the end of life, even if it means dying in an intensive care unit. The Washington Post examined several studies on medical care given to terminally ill people and reports that only 7.5% of hospice patients are African-American and 4.8% are Hispanics, even though their numbers are more than double in the general population. Other studies have shown that blacks are two to three times as likely to want aggressive end-of-life care than whites, and blacks were one-third as likely as whites to have a living will and one-fifth as likely to have do-not-resuscitate orders. Reasons minorities desire high levels of medical care after receiving a diagnosis of a terminal illness may include mistrust of the medical system, a feeling of being denied access to medical care throughout their lives, religious factors, and physicians who aren’t able to explain end-of-life options in a culturally sensitive way, said the article.
Just over half (52%) of surgical visits to hospitals in 2003 were performed in an ambulatory setting, reports the Agency for Healthcare Research and Quality, which issued a report on outpatient surgery trends in 17 states that contribute to its databases. Among the 17 states, however, the rates of ambulatory surgeries varied from 42% to 66%. Lens and cataract surgeries were the most common ambulatory surgery (9%), followed by tonsillectomy (4%), ear-tube surgery (3%), lumpectomy and dilatation and curettage (3% each). A third of patients who had outpatient surgery in 2003 were age 18 to 44. Only 3% of ambulatory surgeries were performed across each age group: hernia repair, procedures for muscles and tendons, and joint surgeries. Nearly a third of outpatient surgery procedures for patients 65 and older were for cataracts and lens procedures.
The average charge for an ambulatory surgical visit in 2003 was $5,600, compared with $28,300 for inpatient surgery. Five of the most expensive outpatient surgeries involved cardiovascular procedures and two of the 10 costliest ambulatory surgeries were spinal fusion and laminectomy. But these high-cost procedures accounted for less than 4% of all outpatient surgeries. Private insurance paid for 55% of outpatient surgeries, Medicare and Medicaid paid for one-third, and less than 4% of ambulatory surgery visits were uninsured.
The state of Washington is suing the federal government to block a policy that requires states to withhold Medicaid coverage for babies born in the United States to undocumented immigrants until an application with proof of citizenship is processed and approved. “This is a basic issue of equality,” said Gov. Christine Gregoire in a statement. “Every baby born on U.S. soil is a U.S. citizen. It is simply not right to deny them healthcare coverage.” While the lengthy application and approval process will delay care for these newborn infants, said Gregoire, it is likely that many immigrant parents will avoid the application process altogether, leaving their newborns without necessary health care, thus relying on more costly ED services. Gregoire said the state will not implement the federal policy until the lawsuit is resolved.
Taking action in regard to the same issue, Sen. Chuck Grassley, R-Iowa, chairman of the Committee on Finance, has introduced the Guaranteed Access to Medicaid for Newborns Act. “Through this act, we will guarantee that children born in America who are eligible for Medicaid can seamlessly get Medicaid coverage,” said Grassley in a statement.
A quality measure requiring that emergency physicians administer antibiotics within four hours to adult patients admitted with pneumonia may not only be unfeasible, it may inadvertently overmedicate some patients and contribute to growing antibiotic resistance, according to a study published in Annals of Emergency Medicine. The antibiotic performance standard set by the Joint Commission and the Centers for Medicare and Medicaid Services may cause doctors to administer antibiotics to patients who do not ultimately have pneumonia in order to meet the quality goal. Or, doctors will continually fall short of an unattainable performance benchmark. The study found that 65.1% of patients suspected of having pneumonia were given antibiotics within four hours of arriving at the emergency department. But 58.5% of those who did not receive antibiotics within the prescribed time did not have a final diagnosis of pneumonia. The delay in giving antibiotics was attributed to patients presenting with atypical pneumonia and overcrowded EDs.
The study recommends that the Joint Commission and CMS establish more attainable goals or change the quality measure definition to include only those patients for whom objective clinical, laboratory, and radiographic evidence is available during the ED stay, and the emergency physician makes a final diagnosis of pneumonia. “Without consideration of these important factors, government quality measures will continue to serve as both folly and woe to healthcare providers, administrators and patients caught in the fray,” concluded the researchers.
The Department of Health and Human Services has announced a new program, Effective Communication in Hospitals, to assist hospitals in communicating with patients and families who do not speak English as their primary language or who are deaf or hard of hearing. The department’s Office for Civil Rights will collaborate with state hospital associations and their members to develop and implement these programs. Hospital associations in the following nine states have committed to working on this initiative: Kentucky, Missouri, New Jersey, New York, Oklahoma, Pennsylvania, Rhode Island, Utah, and Washington. Additional state hospital associations may be added in the future. Part of the initiative also involves sharing results with other hospitals and state associations.
In addition to helping hospitals determine what communication needs they should meet, the program will identify strategies for developing training, best practices, educational materials, and technical assistance. It will also identify resources and approaches to cover costs. Read the press release.
Nearly 80% of children hospitalized at academic children’s hospitals received drugs that were not FDA-approved for their age, according to a study published in Archives of Pediatrics & Adolescent Medicine. Surgical patients and children who were the sickest were the most likely to receive off-label drugs. The lack of clinical trials testing drugs in children forces doctors to use drugs off-label for their pediatric patients, which the researchers called “a huge problem.” Samir Shah, leader researcher and an infectious disease specialist at Children’s Hospital of Philadelphia, told The Philadelphia Inquirer, “We don’t know whether in the absence of off-label use there would have been fewer deaths or more deaths. I suspect that in many instances the drugs were beneficial and in a smaller number of cases the drugs were harmful.” In 2002, Congress passed a law requiring federal agencies to identify medicines whose use in children should be researched further. “This list could and should help prioritize the drugs for further study,” Shah said.
As not-for-profit hospitals grapple with the ongoing nursing shortage, some have developed innovative strategies to attract and retain their nurse workforce and eliminate costly short-term solutions, such as hiring more agency nurses. A Moody’s Investors Service special comment evaluates the potential credit implications of 10 approaches hospitals are taking to meet their nursing needs. Moody’s identified three key tactics as having only positive credit implications: developing an internal nursing pool with existing nurses to allow for flexible staffing and to reduce the need for contract nurses; offering flex time and part-time options to nurses, which increases employee goodwill; and investing in technology to allow nurses to do their jobs faster and better, thereby increasing quality and efficiency and eliminating potential on-the-job injuries.
The other strategies Moody’s evaluated were associated with both positive and negative credit implications, such as increasing salaries to be more competitive, offering sign-on bonuses, beefing up benefit packages, offering bonuses tied to the hospital’s financial performance and quality, recruiting retired nurses, targeting men to enter nursing, creating management opportunities for staff nurses, and offering financial aid and loan forgiveness to students entering nursing. “With salaries and benefit expenses representing approximately 50% of a hospital’s total expenses, the ability to control labor expense growth is an important skill in maintaining an organization’s financial health and a factor in Moody’s assignment of bond ratings,” writes Moody’s. For more information about this special comment, call Moody’s at 212-553-4431.
The Health Resources and Services Administration has announced the implementation of a Proactive Disclosure Service prototype. The PDS is being offered as an alternative to the periodic querying of the National Practitioner Data Bank. It was developed in response to the growing interest of healthcare entities in ongoing monitoring of practitioner credentials.
The prototype will notify healthcare organizations within one business day when the NPDB receives a report on one of their enrolled practitioners. Organizations authorized to use the NPDB can enroll all their practitioners in the new PDS or enroll some practitioners while continuing to periodically query on others using the regular query methods.
The PDS prototype will be available April 30, 2007. All NPDB registered entities have been invited to enroll their practitioners to meet a predetermined number for enrollees. Once this number is achieved, enrollment in the prototype will close. It is anticipated that the PDS prototype period will last approximately 18 to 24 months before it is opened to all authorized data bank entities.
The UB-92 form was replaced by the UB-04 paper form on March 1, according to the Centers for Medicare and Medicaid Services. Unlike the UB-92, the UB-04 form allows providers to submit their national provider identifiers on claims submitted to their fiscal intermediaries. The Health Insurance Portability and Accountability Act requires submission of NPIs on claims effective May 23. Providers that use paper forms for claims submission will be able to submit either the UB-92 or the UB-04 from March 1, 2007, through May 22, 2007. CMS will discontinue accepting the UB-92 forms on May 23, 2007. The UB-04 will retain the CMS-1450 designation.
Further information on the UB-92 and the UB-04 is available through the National Uniform Billing Committee web site. Medicare CMS-1450 UB-04 completion and coding instructions can also be found in Chapter 25 of the Medicare Claims Processing Manual (Pub.100-04).
In a scathing attack on New York hospitals, Gov. Eliot Spitzer wrote a letter to the state’s more than 1,000 hospital trustees urging them to consider why “hospitals that claim poverty and demand billions of dollars in state subsidies” can afford to spend millions contributing to political campaigns and lobbying and pay their executives “multimillion-dollar salaries.” The letter, posted on the governor's web site, accuses the Greater New York Hospital Association and Local 1199/SEIU of distorting Spitzer’s “patient-oriented” healthcare reform proposal in order to preserve the status quo. Although New York leads the nation in Medicaid spending and in per-capita hospital spending, said Spitzer, the state also has the highest number of deaths from chronic diseases in the country and ranks third in per-capita deaths from coronary disease. “New Yorkers pay far too much and get far too little in return,” he wrote. “And yet the same politically driven spending decisions that created this crisis in the first place are what GNYHA and 1199 seek to protect.” Spitzer urged the trustees to join him in having an “honest, open debate on the future of health care in New York” and to challenge the current management practices at the state’s hospitals.
Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee, said he intends to ask Congress to fund the State Children’s Health Insurance Plan with an additional $50 billion over five years for a total budget of $75 billion--far more than what the administration has proposed. SCHIP currently has a $40 billion budget over 10 years, with $5 billion a year allocated to it, reports the Associated Press. President Bush has proposed increasing the budget by $4.8 billion over five years. In remarks made after a speech at the National Press Club, Baucus said the additional funds he is advocating would cover 6 million more children, which would double the number of current enrollees in the program. He affirmed that reauthorization of SCHIP is the Senate Finance Committee’s top priority but admits he doesn’t know where to get the additional funding. “We will find a way” to pay for it, he said. He also said he wants continued coverage for the 640,000 adults already enrolled in the program.
Perioperative patients face an increased risk of harmful medication errors throughout the surgery process due to a lack of comprehensive oversight of medications, according to the annual MEDMARX® Data Report. The report examined more than 11,000 medication errors in the perioperative setting (outpatient surgery, preoperative holding area, the operating room, and the post-anesthesia care unit) from 1998 to 2005 and found that 5% of the errors resulted in harm, including four deaths. Children are at higher risk for harm in the perioperative setting, with nearly 12% of pediatric medication errors resulting in harm.
Most of the errors involved antibiotics and pain killers. Common types of errors included healthcare providers giving the wrong medication, the wrong amount, at the wrong time, or forgetting to administer medication or administering it incorrectly. The U.S. Pharmacopeia, which operates the MEDMARK database, recommends that hospitals and health systems dedicate pharmacists to the perioperative units so they can oversee the distribution of medications and that surgical staff better coordinate handoffs to eliminate the loss of patient information.
Cardiac-care specialty hospitals appear to be driving a large increase in cardiac procedures in Medicare patients, according to a study published in the March 7 issue of JAMA. Researchers found a 19.2% increase in coronary revascularization procedures in areas where specialty hospitals have opened. In contrast, there was only a 6.5% increase in cardiac procedures when a general hospital started a new cardiac program and a 7.4% increase in areas where no new cardiac programs were started. It wasn’t clear from the study, however, that specialty hospitals were doing unnecessary procedures. “They could be opening up in areas where the physicians or companies understand there is a great need, and so they are appropriately doing more procedures,” lead researcher Brahmajee Nallamothu, an assistant professor of internal medicine at the University of Michigan, told The Washington Post.
Illinois Gov. Rod Blagojevich has announced a healthcare reform proposal to give the approximately 1.4 million uninsured adults in the state--75% of whom have moderate or higher incomes--access to affordable health insurance. Last year, Illinois extended coverage to all children in the state. Blagojevich’s plan, which is estimated to cost $2.1 billion a year, does not mandate universal coverage, reports the Chicago Tribune. Instead, it subsidizes insurance premiums for families earning up to 400% of the federal poverty level ($80,000 for a family of four), sets up purchasing pools so small businesses and individuals can buy less expensive insurance, requires employers to provide insurance or pay a payroll tax, and prohibits insurers from denying coverage to anyone who applies.
Under the proposal, premiums for employer-sponsored insurance would be capped at 3% to 5% of annual income for families earning between 100% to 400% of the federal poverty level, while individuals who purchase health insurance on their own would pay no more than 5% to 7% of their annual income if they earn between 100% to 400% of the poverty level. In addition, the proposal extends Medicaid coverage to low-income adults without children. Blagojevich’s plan also includes better management of chronic conditions, increasing the health system’s capacity, improving patient safety, promoting electronic medical records, increasing healthcare transparency, and reducing administrative costs. Read the press release.
If Congress decides to hold funding at its current level for the State Children’s Health Insurance Program, many children could lose their health insurance, and states will be hard-pressed to expand coverage for the nearly 2 million uninsured children who are now eligible for the program, according to an article in the March-April 2007 issue of Health Affairs. Fourteen states are expected to run out of money for the program this year, and some states have been exploring the need to cut enrollments soon.
In reauthorizing SCHIP, the federal government might consider adjusting the federal funding formula to take into account potential increases in the demand for coverage spurred by economic downturns or the further erosion of employer-sponsored health insurance, write the researchers. By changing the federal funding structure from its current block-grant formula to one that rewards states with high participation rates in both Medicaid and SCHIP, states would be encouraged to address enrollment barriers and to adopt cost-effective outreach programs.
The authors also suggest increasing flexibility and funding to support automatic enrollment in SCHIP. In addition, better information is needed about the quality of care under various SCHIP programs. Reauthorization could provide an opportunity to examine the costs of providing care for the program’s enrollees and a way to manage high-cost cases, the authors write.
HCA Inc. will post prices for common hospital procedures at most of its 165 U.S. hospitals by this summer, reports The Tennessean. Last October, HCA posted prices at 10 of its Dallas-area hospitals and will do the same for 13 Tennessee hospitals this spring. Uninsured consumers can go online to see what they will be expected to pay for a procedure, and consumers with insurance will receive details on how to get an estimate that takes their health plan discounts into account. Since October, 209 people have asked for price estimates at the Dallas HCA hospitals. The Tennessee Hospital Association is also planning on launching a web site containing hospital charges this spring. “We’d rather get it out there, do it ourselves, before we’re told we have to do it,” president Craig Becker told The Tennessean.
Male and female physicians have different job turnover rates, which will become more of a significant trend as women make up a greater percentage of the physician work force, according to a 2006 retention survey from the American Medical Group Association and physician and executive search firm Cejka Search. Turnover among male physicians increased to 6.8% in 2006 (up from 5.9% in 2005), while turnover among female physicians decreased from 7.5% in 2005 to 6.6% in 2006. The total average rate of physician turnover increased slightly to 6.7% in 2006, up from 6.4% in 2005.
“Poor cultural fit” is the single most frequently mentioned reason for physicians to voluntarily leave a practice (51%), according to the survey. “Relocated to find a better community fit” was mentioned 20% of the time. Family was also frequently cited as a reason for leaving, with 42% of respondents saying they wanted to be closer to family and 22% saying a spouse’s job required relocation. “Leaving to seek higher compensation” was mentioned 32% of the time, with incompatible work schedule and excessive call schedule each being mentioned 17% of the time. The proportion of physicians, both male and female, who reported working part time increased to 20% in 2006 from 13% in 2005. Flexible work hours or part-time options were reported as one of the top three ongoing retention initiatives that medical group leaders have found to be effective. Read the news release.
At a Senate Finance Committee hearing the day the Medicare Payment Advisory Commission released its report on alternatives to Medicare’s physician payment update formula, chairman Max Baucus, D-Mont., indicated that the sustainable growth rate would not be revamped this year. “I think we’re still at the point where we have to deal with this on a yearly basis,” Baucus said of annual eleventh-hour efforts by Congress to prevent Medicare payment cuts to doctors, reports CQ HealthBeat News. “I think we’re going to get there, but I don’t think it’s this year. It’s premature.” In testimony before the committee, the AMA called on Congress to repeal the SGR, but said it did not support one of MedPAC’s two recommendations--to expand the Medicare spending limit currently applied only to physicians also to hospitals and other Medicare providers. Peter Orszag, director of the Congressional Budget Office, told the committee that replacing the SGR with a yearly increase to doctors based on a Medicare economic index and without increasing premiums to Medicare beneficiaries would cost $332 billion over 10 years.
Interventions designed to improve the quality of care for diabetes, asthma, and hypertension and adopted for 1,000 health centers nationally has improved processes of care for these conditions but did not improve intermediate clinical outcomes, according to a study supported by the U.S. Department of Health & Human Services’ Agency for Healthcare Research and Quality, the Health Resources and Services Administration, and The Commonwealth Fund. Health centers provide care for more than 14 million Americans, many of whom are uninsured or underinsured or are members of immigrant or minority groups.
The study, published in the March 1 New England Journal of Medicine, analyzed interventions with 9,658 patients at 44 health centers nationwide, approximately half of which were in urban areas. Among the process improvements researchers found were a 21% increase in foot examinations for patients with diabetes; a 14% increase in the use of anti-inflammatory medication for patients with asthma; and a 16% increase in the level of screening for glycated hemoglobin in persons with diabetes mellitus. Overall, they found a 6% improvement in processes of care related to screening and disease prevention and a 5% improvement in processes related to disease monitoring and treatment. But the researchers found no improvement in intermediate outcomes, including control of glycated hemoglobin for people with diabetes; control of blood pressure for patients with hypertension; and no reduction in urgent care, emergency department visits, or hospitalization for people with asthma. “The substantial room for improvement in the post-intervention period suggests the need for continued refinement of these quality improvement methods,” said the researchers. Read the news release.
The U.S. Food and Drug Administration is alerting healthcare providers that some hospital networks, medical devices, and IT systems may “generate adverse events” as a result of Daylight Savings Time occurring three weeks earlier this year. Congress passed a law in 2005 that DST will now commence the second Sunday in March (instead of the first Sunday in April) and will end the first Sunday in November (instead of the last Sunday in October) as an energy-saving measure. On March 11, automated systems that rely on internal clocks may not reset if they contain incorrect values for DST. As a result, patient treatment may not be administered as prescribed.
The FDA recommends that providers get patches from manufacturers for any devices that have internal clocks and then check on the four critical dates (March 11, April 1, Oct. 28, and Nov. 4) to make sure the new time is correct. The FDA has also issued an advisory for consumers that providers may give to patients so they are vigilant about home medical equipment or during a hospitalization. If deaths or serious injuries result from a device that failed to reset to the correct time, hospitals are required to report them to the FDA. For adverse events that are not required to be reported to the FDA, the agency recommends that providers report them to the device manufacturer and to MedWatch, the FDA’s voluntary reporting program.
Although it is widely believed that a Cesarean-section delivery always costs more than a vaginal birth, a study published in the Journal of Evaluation in Clinical Practice argues that true delivery costs should also include neonatal intensive care unit charges. By linking mother and child hospital records at three urban Baltimore hospitals, the study found that average total charges for vaginal deliveries that included NICU charges were $17,624.38 compared with $13,805.47 for Cesarean deliveries that included NICU charges. Babies delivered vaginally had a 41% NICU utilization rate compared with 22% for Cesarean babies. And babies born to mothers who had comorbidities such as hypertension and diabetes had a greater likelihood of being transferred to the NICU, leading the researchers to recommend prenatal care that targets maternal co-morbidities to reduce greater lengths of stay and medical charges. Performance measures should not be limited to Cesarean section rates but also include data on prenatal care and maternal comorbidities, they write.
Providing health insurance for all Americans is the most crucial domestic issue currently facing President Bush and Congress, said 55% of 1,281 adults polled by The New York Times and CBS News. That the United States has 47 million uninsured people was considered a “very serious” problem by 70% of the respondents--a much bigger issue by far than holding down healthcare costs. Nearly half (49%) of those polled said they’d be willing to pay up to $500 more in taxes each year to fund universal health insurance for their fellow citizens.
Only 24% of respondents said they were happy with President Bush’s approach to reducing the ranks of the uninsured, while 62% said the Democrats would do a better job reforming the country’s healthcare problems, reports The New York Times. Democratic presidential candidate Hillary Rodham Clinton received a vote of confidence for her ability to solve the healthcare crisis by more than a third of survey respondents. Expanding the State Children’s Health Insurance Program to cover all uninsured children was favored by 84% of poll participants. And although people were mostly satisfied with the quality of their health care, nearly half said their employers had shifted more healthcare costs to them recently. A quarter of respondents with insurance said that members of their families had skipped medical care when insurance wouldn’t pay for it.
Compared with children with health insurance, uninsured children admitted to the hospital with injuries were twice as likely to die in the hospital and they were 44% less likely to be discharged to rehabilitation care, according to a recent Families USA report, The Great Divide: When Kids Get Sick, Insurance Matters. Uninsured children receive “less and inferior care” than children with insurance, and for those who are the sickest, this disparity “can lead to most severe and tragic consequences,” wrote Ron Pollack, executive director of Families USA, in a letter accompanying the report, which was sent to members of Congress. Uninsured children were also less likely to receive procedures for certain medical conditions: 18% less likely to receive a laparoscopic appendectomy for appendicitis, less than half as likely to get ear tubes for otitis media, and 32% less likely to receive intracranial pressure monitoring for traumatic brain injury. The study highlights the consequences of lack of insurance among children as Congress begins debate on the reauthorization of the State Children’s Health Insurance Program.
The Department of Health and Human Services unveiled a plan for “chartering” local collaborative organizations that are working to improve quality and value in health care to assess the performance of providers and report these findings publicly. Under the plan, HHS would select qualified regional collaboratives--local area physicians, nurses, hospitals and other health care providers working collaboratively with health plans, employers, unions and other healthcare purchasers--to be chartered as “value exchanges,” a role that would require them to provide public reports on the performance of providers in their area. The value exchanges would be independent, not-for-profit organizations. Existing local and regional collaboratives that have developed independently in recent years would be expected to form the initial core of value exchanges receiving HHS charters. Collaboratives that meet additional criteria may qualify to pool their data with Medicare data for broadest-based measurement of provider performance and quality outcomes.
In measuring providers’ performance and publicly reporting the findings, the value exchanges would use nationally recognized standards. These standards, developed through public-private efforts, also form the basis for ongoing Medicare quality and performance reporting. The exchanges could also pioneer new quality improvement strategies and share results through a learning network. The new system would be administered by HHS’s Agency for Healthcare Research and Quality.
The Panel on the Nonprofit Sector invites the not-for-profit community to comment on the second draft of Principles for Effective Practice through March 30. The principles propose parameters of good governance and practice that charitable organizations should aspire to follow. The draft principles were developed by the panel’s advisory committee on self-regulation of the charitable sector, comprising 34 leaders from charities, foundations, and academic institutions. After reviewing more than 125 comments it received in the first-round comment period, the committee made a number of revisions to the draft principles, including clarifying language about how organizations should comply with legal requirements. The five categories covered in the second draft of the principles are: facilitating legal compliance and public disclosure, effective governance, strong financial oversight, responsible fundraising, and risk management practices and adoption of a code of ethics.
The Medicare Payment Advisory Commission on Thursday released its report to Congress on its recommendation for Medicare updates for 2008. For both inpatient and outpatient services MedPAC recommends updates equal to the hospital market basket implemented concurrently with a quality incentive payment program. Although separately computed and paid, a hospital’s quality performance payment would likely determine whether its net increase in payments in 2008 would be above or below the market basket increase. Part of the funding for a quality incentive payment policy should come from reducing indirect medical education payments. MedPAC recommends that Congress reduce the IME adjustment by 1 percentage point to 4.5% per 10% increment in the resident-to-bed ratio, concurrent with implementation of a system for adjusting payments for severity of illness.
For the physician fee schedule, MedPAC recommends an update equal to the increase in input prices less the expectation for productivity growth. For the outpatient dialysis payment system, the update should be equal to the projected change in input prices less the commission’s expectation for productivity growth. The report also suggests bundling all dialysis-related services, including drugs, into a single payment. For skilled nursing facilities, home health agencies, and long-term care hospitals, MedPAC advises no increases in the payment rates. And for inpatient rehabilitation facilities, MedPAC recommends an increase of 1%, recognizing that they are transitioning from a period of historically high margins and growth to lower margins and volume declines brought about by the Centers for Medicare and Medicaid’s modification of the 75% rule.
Download the report.
Not-for-profit organizations’ reporting of executive compensation contains “significant reporting errors and omissions in specific areas, particularly excess benefit transactions and transactions with disqualified persons, as well as potential compliance issues related to loans made to officers,” according to a report by the Internal Revenue Service based on compliance checks and investigations of 1,826 public charities and private foundations. Abuses by 25 of the organizations examined--excessive salary, payments to managers not reported as compensation, loans made to disqualified people, loans not repaid according to terms, and payments to officers’ for-profit corporations in excess of the value of services provided--“resulted in proposed or assessed excise taxes aggregating in excess of $21 million against 40 disqualified persons or organization managers.” However, the document states that, thus far, the IRS’s examinations have turned up mostly reporting errors. And although many not-for-profit organizations paid high compensation to executives, the amount was substantiated with appropriate data in most cases.
Based on its findings that there is considerable confusion about Form 990 to report executive compensation, the IRS has concluded that the form should be revised to enable more accurate reporting and that not-for-profits need more education on filling out the form. For example, none of the 50 not-for-profits that the IRS checked for compliance that reported compensation over $250,000 filed schedules detailing the compensation. The IRS also said that because the compliance checks did not constitute a statistical sample of not-for-profit organizations, “continued work in the area of executive compensation is warranted.”
The Medicare Payment Advisory Commission released on Thursday its report examining alternative mechanisms for controlling physician expenditures under Medicare. The commission recommended two possible paths for Congress to follow, admitting that it could not come to consensus on one recommendation because significant disagreement exists within the commission about the utility of expenditure targets. One path would repeal the flawed current sustainable growth rate formula and not replace it with a new expenditure target. Congress would then have to make explicit decisions about how to update physician payments. Alternatively, Congress could replace the SGR with a new expenditure target system, which MedPAC said should apply to all providers, not just physicians. Rewards and penalties would be applied on a geographic basis, and Medicare would provide data measuring resource use to physicians so they would be informed of their practice patterns. Medicare would also provide opportunities to selected groups of providers who practice as a network and share the savings they generate.
The report also states that without accompanying payment policies that change the inherent incentives of fee-for-service payment, the ability to influence the behavior of individual physicians will be limited. Download the report.
Hospitalists frequently don’t provide enough or timely information about a patient’s diagnosis, treatment, and follow-up care in discharge summaries to primary care physicians, according to an article published in the Feb. 28 issue of JAMA. The study, which did not focus on hospitalists, summarized data from 55 published studies on the availability, timeliness, content, and format of discharge communications. It found that direct communication between hospitalists and primary care physicians occurred in less than one in five cases at the time of discharge. Between 16% and 53% of patients saw their primary care physicians before the physician received a discharge summary, which often contained missing test results, medication information, and follow-up plans. The researchers recommend that the hospital provide a copy of the most pertinent data to newly discharged patients, who could hand-deliver this information to the primary care physician at the first follow-up visit. Read the abstract.
The American Public Health Association released its blueprint for strengthening the nation’s pandemic preparedness. Among its top concerns is the need for additional resources for an already overburdened public health workforce that may lack the resources to fully respond to a flu outbreak. Other needs include clear federal guidance on school closures, quarantine, and occupational health in the event of a pandemic. APHA’s recommendations include increasing funding for states, localities, hospitals, and public health labs to expand their capacity to respond to pandemic flu, and greater investment in the public health workforce so there are enough employees necessary to serve on the frontlines in preparing for and responding to a pandemic and annual seasonal epidemics. The APHA also calls for emergency Medicaid coverage to ensure that uninsured Americans will receive appropriate countermeasures and care in the event of pandemic flu.
The healthcare utilization rate among young adults between 20 and 30 years old in Minnesota has increased 9% between 2001 and 2005, according to a study by Blue Cross and Blue Shield of Minnesota. The trend is troubling, given that twice as many young adults are uninsured as the general Minnesota population--14% compared with 7%, according to a Minnesota Department of Health study. The report also finds that behavioral health problems account for the fastest growing category of care, with the number of visits among young adults rising 157% between 2001 and 2005. (The growth in visits for behavioral health problems for members of all ages increased 55.9% during the same period.) Back and neck pain are one of the most common health problems among young adults, with noninjury muscle and joint pain accounting for 326 visits per 1,000 members ages 20 to 30 in 2005, up 69% from 2001. In addition, treatment for breast cancer among young women has grown 113.6% between 2001 and 2005.
The Centers for Medicare and Medicaid Services has announced that it will hold a second listening session April 12 to solicit comments on the draft plan for Medicare hospital value-based purchasing. CMS expects to post the draft plan on its web site no later than March 22, and will accept comments on the plan through April 19. Registration for the listening session closes April 9. Those wishing to attend the meeting or listen by teleconference should complete the online registration (http://registration.mshow.com/cms2/).
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