The outlook for the nonprofit hospital and healthcare system sector remains negative, according to Fitch Ratings’ 2009 Nonprofit Hospitals and Health Care Systems Outlook. The negative outlook reflects a weakened credit environment, aspects of which include constrained access to capital, a deteriorating payer mix, elevated interest rates, and severe investment losses.
Fitch says the combined effects of significant liquidity declines, increasing uncompensated care, and higher capital costs are adversely affecting many hospitals' credit profiles. Operating profitability is likely to depress well into 2010.
Fitch notes that many of its rated borrowers will be able to accommodate observed and expected performance deterioration within the tolerances of their assigned rating levels. The hospitals and systems most at risk will include those with extreme performance deterioration, those whose ratings are very close to the next lower rating level, and those with exacerbating circumstances, such as unavoidable capital spending commitments. Overall, Fitch expects that affirmations will constitute the bulk of its 2009 rating actions, with downgrades moderately outpacing upgrades.
Read the report (registration required).
As unemployment rates reach the highest levels in 16 years, a new analysis from The Commonwealth Fund finds that few laid-off workers--only 9 percent--took up coverage under the Consolidated Omnibus Budget Reconciliation Act (COBRA) in 2006.
According to the report, unemployed workers who also lose their health insurance would need substantial financial assistance, covering 75 to 85 percent of their health insurance premiums, for their premium contributions to remain at the levels they paid while they were working. The report also finds that low-wage workers are at a particular disadvantage--with only 38 percent eligible to receive COBRA benefits--because they don't receive health insurance through their jobs, work for small firms that aren't required to offer COBRA, or are uninsured to begin with.
Sixty-six percent of all current workers, if laid off, would be eligible to extend their health insurance under COBRA. But for most people, COBRA payments are unaffordable, about four to six times higher than the amount of money they contributed to their health insurance when they were employed.
Read the report.
The number of outpatient surgery visits in the United States increased from 20.8 million visits in 1996 to 34.7 million visits in 2006, according to a report from the Centers for Disease Control and Prevention. The report, Ambulatory Surgery in the United States, 2006, contains the first data on outpatient surgery visits since 1996.
The data, which were collected from 142 hospitals and 295 freestanding centers as part of the National Survey of Ambulatory Surgery (NSAS), show that outpatient surgery visits accounted for about half of all surgery visits in 1996 but nearly two-thirds of all surgery visits in 2006. Outpatient surgery visits to freestanding centers increased three-fold from 1996 to 2006, whereas the rate for outpatient surgery visits to hospital centers was relatively unchanged. Visits to hospital centers, at 19.9 million, continued to outnumber those to freestanding centers, at 14.9 million (57 percent compared to nearly 43 percent).
The report also found that in 2006, the procedures performed most often during outpatient surgery visits included endoscopies of the large intestine (5.8 million) and small intestine (3.5 million) and extraction of lens for cataract surgery (3.1 million). The average time spent in the operating room during an outpatient surgery visit varied from 61.7 minutes for hospital centers to 43.2 minutes for freestanding centers. Time spent in surgery and recovery and overall visit time were also higher for hospital centers. More than half of outpatient surgery visits (53 percent) were paid by private insurance.
The privacy rule of the Health Insurance Portability and Accountability Act (HIPAA) continues to have a significant negative impact on the scope, pace, and costs of research, according to The HIPAA Privacy Rule: Lacks Patient Benefit, Impedes Research Growth, a report of the Association of Academic Health Centers (AAHC).
The report is based on findings from a questionnaire sent to vice presidents for research and principal investigators at academic health centers nationwide. The findings reveal that researchers have difficulty recruiting participants and that the rule creates barriers to diversity in research studies. Such events are fundamentally changing the conduct of research and threatening the scientific credibility of future research.
To remedy this threat to research, AAHC calls for a revision of the HIPAA privacy rule, including an exemption of biomedical research from the rule and an augmentation of the well-established common rule with more explicit patient privacy protections.
A new report by the Deloitte Center for Health Solutions finds significant opportunities for the adoption of personalized medicine to produce a positive return on investment for key stakeholders in the U.S. healthcare system. The report also finds that consumers stand to gain the most significant ROI within the shortest time period.
The report, titled “The ROI for Targeted Therapies: A Strategic Perspective,” provides an analysis of personalized medicine’s economic value proposition. It examines the importance of ROI for multiple stakeholders--consumers, diagnostic companies, pharmaceutical and biotechnology companies, and payers. A literature review of two clinical scenarios found that all stakeholder groups experienced a positive ROI under certain conditions, and that consumers consistently experienced a positive ROI across all scenarios. Payers received only a marginal benefit, and that was after six years.
The report also concludes that providers could benefit from the new tools offered by personalized medicine to improve patient care; however, reimbursement issues will need to be worked out with payers. Additionally, as providers implement electronic health records, new decision-support tools will help facilitate the adoption of disease-specific standards of practice that can provide real-time data to help prioritize therapies based on potential drug interactions and patient clinical profiles.
Health Affairs has published a package of papers on the value equation and what has become a paramount question in health care: What should we pay for and how much?
As a depressed economy further limits the resources available for health care, desires and demands for care must be balanced against various realities, including the effectiveness of care or the desire for other goods and services. The papers consider the need for this balance, as well as questions of measurement, the influence of the payment system, and the locus of accountability for quality.
Many of the papers in the package were initially presented at the Fifteenth Annual Princeton Conference in May 2008, which considered the question “Can Payment and Other Innovations Improve the Quality and Value of Health Care?”
Read the papers.
A study published in the Archives of Internal Medicine finds that when physicians in hospitals use healthcare IT to its full potential there are fewer deaths, fewer complications, and lower health care costs.
The study surveyed physicians from 41 hospitals in Texas treating a diverse group of patients across a variety of conditions including heart attack, heart failure, and pneumonia. Respondents were asked about their use of several different types of health IT, including electronic notes and records, order entry, and clinical decision support. Researchers found that relatively modest increases in technology use had dramatic results: for example, a 10 point increase in the use of electronic notes and medical records was associated with a 15 percent reduction in the likelihood of patient death. When physicians electronically entered their instructions for patient care, there was a 55 percent reduction in the likelihood of death for some procedures. Increased use of health IT was also linked to lower costs: hospitals with automated test results, order entry, and decision support experienced lower costs for all hospital admissions (-$110, -$132, and -$538, respectively, per admission).
The study was supported by the Commonwealth Fund and was led by faculty at the UT Southwestern Medical School and the Johns Hopkins University School of Medicine.
Read a summary of the study.
Some 7.4 million children were enrolled in the State Children's Health Insurance Program (SCHIP) in 2008--a four percent increase over the previous year--according to the U.S. Department of Health and Human Services (HHS). The announcement comes as Congress is debating reauthorization of SCHIP, which is projected to expand coverage to an additional four million children.
Created in 1997, SCHIP targets uninsured children who live in families with incomes generally around 200 percent of the federal poverty level ($42,000 for a family of four in 2008), which is too high in most states to qualify for Medicaid, but in many cases, too low to afford private coverage. The Medicare, Medicaid and SCHIP Extension Act of 2007 extended the program until March 31, 2009, with an appropriation of $5 billion for each of FY08 and FY09, with FY09 funding available only through March 31, 2009. The legislation also provided $1.6 billion in funding for states with SCHIP budget shortfalls for FY08 and $275 million for state shortfalls through the first two quarters of FY09.
Enrollment data, compiled by the Centers for Medicare & Medicaid Services, also show that 334,616 adults were covered with SCHIP funds during 2008.
See 2008 SCHIP enrollment data by state.
A new report from the Noblis Center for Health Innovation has found that hospitals and health systems across the United States are cutting back on both capital spending and unprofitable healthcare services as a result of the economic crisis.
The study found that more than 56 percent of respondents saw a decrease in operating margin over the last quarter, and 39 percent expect a decrease in the next 12 months. Of even greater concern were investment losses, which were significant last year and remain uncertain for 2009. Virtually all respondents who recently attempted to access capital or refinance encountered difficulties in doing so, and two-thirds had halted, resized, or changed major capital projects. As major construction projects wind down, philanthropic prospects for the coming year are also diminished.
While overall profitability is a concern, most respondents believe that utilization at their facilities will continue to grow. Seventy-one percent of respondents expect inpatient utilization to increase slightly during the next 12 months, and 82 percent expect outpatient utilization to increase in the same time period.
The Centers for Medicare & Medicaid Services (CMS) has finalized three national coverage determinations (NCDs) on preventable surgical “never events” including performing the wrong surgery on a patient, performing surgery on the wrong body part, and performing surgery on the wrong patient.
As described in a Dec. 3, 2008, HFMA News feature on the proposed NCDs, the effect of these surgical errors will not be limited to payments to hospitals for inpatient stays, as is the case with “never event” hospital-acquired condition provisions in the Inpatient Prospective Payment System final rules. Instead, these NCDs could affect payment to hospitals, physicians, and any other healthcare providers and suppliers involved in the erroneous surgeries.
Read the release.
The effects of the recession are worsening downward operating trends in revenue and inpatient volumes and increasing capital and operating costs that were already apparent in the not-for-profit healthcare sector prior to 2008, according to a new report from Standard & Poor's Ratings Services. New challenges--including rising pension costs and state budget stress--are likely to compound the problems facing the sector.
Other challenges include scarcer capital, a growing burden of uncompensated care aggravated by the deepening recession, and softer volumes at a time when the costs of many large projects are coming online. As a result, Standard & Poor’s expects rating downgrades to significantly exceed upgrades in 2009.
One hopeful note in the report is the potential for additional federal government funding for Medicaid, which will help relieve the pressure of a growing number of unemployed, uninsured patients.
The report is available at www.standardandpoors.com/ratingsdirect (subscription required).
More and more, hospitals are stopping or postponing "shovel-ready projects,” according to a new survey from the American Hospital Association. The survey showed that hospitals’ ability to obtain the necessary funds to upgrade their facilities or invest in new clinical and information technologies is severely restricted due to the “capital crunch” and the recession.
The vast majority of hospitals report that borrowing funds through tax-exempt bonds is difficult or impossible. In addition, loans from banks or other financial institutions are similarly difficult to obtain. Hospitals’ reserves also have taken a hit due to falling stock prices, net income is down, and philanthropic donations have slowed, leaving hospitals with less of their own funds to rely on to make needed improvements.
Nearly half of hospitals surveyed have postponed projects that were to begin within the next six months and many have stopped projects that were already in progress.
Hospitals are clearly feeling the impact of financial market turmoil and the economic downturn, according to The Financial Health of U.S. Hospitals and Health Systems, a new report released today by HFMA.
The report is based on survey data from more than 300 healthcare finance executives across the country. A majority of respondents (55 percent) report declines in inpatient volumes, and a similar number (53 percent) plan to hold off or substantially cut back on new construction projects. The survey also finds that effects of the credit crunch have been widespread, with both financially strong and challenged hospitals reporting difficulties in accessing capital.
“Financial leaders need to work closely with all of the leadership within their organizations and their communities. They need to provide information about the seriousness of this downturn, the potential impact on their operations and communities, and possible solutions,” says HFMA President and CEO Richard L. Clarke. “One positive note is that the fundamental outlook for the healthcare sector still remains positive, in terms of long-term demand. While there are significant issues to grapple with in terms of payment, provision of healthcare services is a critical component of a vibrant economy and society.”
A new report from the Agency for Healthcare Research and Quality (AHRQ) describes the challenges and opportunities AHRQ grantees have faced in implementing or evaluating barcoding technologies to improve care for patients, increase efficiency, and contain costs.
According to the report, there are more than a million injuries and almost 100,000 deaths attributed to medical errors each year. Many of these errors occur in the dispensing, transcribing, and administering stages of the medication process. Barcode medication administration (BCMA) and electronic medication administration record (eMAR) technologies are two ways to improve inpatient medication safety by automating the process of medication checking and making the medication administration record electronic.
Although there is substantial evidence and industry support in favor of BCMA and eMAR, adoption in the United States is still low. Low adoption persists due in large part to the complexities associated with implementation. Experiences from the AHRQ projects should provide lessons learned to ease implementation for other organizations considering medication administration technologies.
HFMA CEO and President Richard L. Clarke adds his best wishes for the new administration of President Barack Obama to those of the millions of other Americans who watched President Obama’s inaugural address.
Commenting on President Obama’s inaugural pledge “…to raise health care’s quality and lower its cost,” Clarke notes, “The U.S. healthcare system has escaped systematic reform for decades because our leaders have failed to choose hope over fear, and unity of purpose over conflict and discord. The team President Obama has assembled to lead systematic reform efforts appears to be up to the task--so I have high hopes.”
Clarke also calls upon healthcare financial leaders to “be a positive force for change by providing insights into the consequences of decisions on resource provision and use.”
Read Clarke’s full comments.
With health reform high on the agenda of the new Congress and President, an analysis of legislative proposals--including the plans of President Barack Obama and Senate Finance Committee Chairman Max Baucus (D-MT)--shows that several proposals already put forth could substantially reduce the number of uninsured Americans, and would either reduce healthcare spending or add only modestly to annual healthcare expenditures.
The analysis, by Sara Collins and colleagues at The Commonwealth Fund, finds that the proposals outlined by President Obama and Senator Baucus could cover almost all Americans; however, analysts say that to guarantee near universal coverage, mixed private-public proposals like these would need to require that all Americans obtain coverage.
The analysis provides coverage and cost estimates for 2010 prepared by the Lewin Group, assuming full implementation of healthcare plans by then. Lewin projects that by 2010, absent the implementation of any large-scale reform, nearly 49 million Americans will be uninsured.
Read the analysis.
Leaders in health care and healthcare policy feel strongly that President Barack Obama should pursue an ambitious healthcare reform agenda that expands coverage while also improving quality and efficiency and controlling costs. Sixty-six percent say that the new administration should pursue the goals simultaneously, according to the latest Commonwealth Fund/Modern Healthcare Health Care Opinion Leaders Survey
When asked which features were important to act on immediately, an overwhelming majority--83 percent--said expanding the State Children's Health Insurance Program (SCHIP) was absolutely essential or very important. Investment in healthcare IT in the economic stimulus package (supported by 78 percent) and access to public health insurance coverage for the long-term unemployed (supported by 72 percent) were also seen as crucial.
The survey asked respondents to identify what they think the new Obama administration should make its top healthcare priorities. Ninety-two percent favored allowing uninsured people to buy health insurance through a health insurance exchange, while 89 percent supported expanding eligibility for Medicaid and SCHIP to low-income adults and children. When asked how the administration should prioritize reform measures if they needed to happen in phases, a wide majority felt that Medicaid and SCHIP eligibility expansion (82 percent) and funding for healthcare IT (76 percent) should be part of phase one.
Read the survey results.
The U.S. Department of Health & Human Services’ (HHS) Office of Inspector General (OIG) has presented its annual performance report for FY08, noting that the OIG’s oversight efforts produced a $17 to $1 return on investment over the past year.
The FY08 report highlights $2.35 billion in HHS receivables that were court ordered or agreed to be paid through civil settlements resulting from cases developed by OIG investigators, and an additional $1.33 billion in audit recoveries that HHS program managers agreed to pursue as a result of OIG audit disallowance recommendations. HHS program managers also agreed to implement 85 of OIG’s quality and management improvement recommendations.
In a pre-inaugural package of papers released on the Health Affairs web site, politicians, policy makers, and business and academic leaders offer their thoughts on the prospects for healthcare reform and their advice on a domestic and international health policy agenda.
Authors include Reps. Jim Cooper (D-Tenn.) and Michael Castle (R-Del.), Mayo Clinic CEO Denis Cortese and Mayo Clinic Health Policy Center executive director Jeffrey Korsmo, Intel Corporation chairman of the board Craig Barrett and Pacific Business Group on Health national health policy director Peter Lee, Stanford University professor Victor Fuchs, Brookings Institution senior fellow Henry Aaron, National Academy for State Health Policy executive director Alan Weil, Project HOPE senior fellow Gail Wilensky, and Global Health Council president and CEO Nils Daulaire.
The Centers for Medicare & Medicaid Services (CMS) has issued quality measurement, resource use measurement, and value-based purchasing roadmaps for the traditional Medicare fee-for-service (FFS) program.
The roadmaps outline the activities that CMS has undertaken to implement value-driven health care, including summaries of the various projects to test the policy and concepts designed to provide high quality, affordable health care. They are also intended to provide information to policy makers about the demonstrations and pilot programs that are already underway and to articulate the overarching principles guiding further efforts. “It is incumbent on us to use the lessons we’ve learned with many of the tools we have implemented to help the nation’s healthcare leaders as they look to improve the healthcare system in a time that’s even more critical because the projected rate of growth in healthcare costs is climbing at an unsustainable rate,” said CMS acting Administrator Kerry Weems.
Read the roadmaps.
The U.S. Department of Health and Human Services (HHS) has released a final rule on adoption of ICD-10 code sets that pushes the compliance deadline back by two years.
The final rule replaces the ICD-9-CM code sets now used to report health care diagnoses and procedures with greatly expanded ICD-10 code sets, with a compliance date of Oct. 1, 2013. This compliance date is two years later than the Oct. 1, 2011, compliance date initially proposed by HHS, and responds to concerns raised in comments on the proposed rule regarding implementation costs, personnel training, and testing needs.
ICD-9-CM is widely viewed as outdated because of the limited ability to accommodate new procedures and diagnoses within the established hierarchy of the coding system. ICD-9-CM contains only 17,000 codes, and Volume 3, which contains the hospital inpatient procedure codes, has been running out of available space for several years. By contrast, the ICD-10-CM and ICD-10-PCS code sets contain more than 155,000 codes and can accommodate a host of new diagnoses and procedures.
A related second final rule adopts an updated X12 standard, Version 5010, for certain electronic healthcare transactions, an updated version of the National Council for Prescription Drug Programs standard, Version D.0, for electronic pharmacy-related transactions, and a standard for Medicaid pharmacy subrogation transactions. The final rule also delays the compliance date for the 5010 standards by 21 months, to Jan. 1, 2012.
Read the final rules for ICD-10 code sets and electronic transaction standards.
Data collected from eight hospitals in eight cities around the world indicate that a 19-item surgical safety checklist can have a significant impact on reducing complications and deaths associated with surgery.
The study, reported in a special online article from The New England Journal of Medicine, prospectively collected data on clinical processes and outcomes from 3,733 patients age 16 or older who underwent noncardiac surgery. After the checklist was introduced, data was subsequently collected on 3,955 patients. Introduction of the checklist resulted in a decline for rate of death from 1.5 percent to 0.8 percent and a decline in inpatient complications from 11 percent to 7 percent.
The checklist was based on guidelines published by the World Health Organization in 2008 identifying multiple recommended practices to ensure the safety of surgical patients worldwide.
Read the article.
The Network for Regional Healthcare Improvement (NRHI), a grantee of the Robert Wood Johnson Foundation, has released the second in a series of reports examining ways to reform the healthcare payment system to improve quality and reduce costs.
Titled From Volume to Value, the report offers an explanation of problems with the current payment system, and explains alternatives that could solve these problems without placing the kinds of restrictions on physicians and patients that caused many managed care initiatives to fail a decade ago.
The information in the report was originally prepared for NRHI’s 2008 Summit on Healthcare Payment Reform. At that summit, more than 100 healthcare leaders from across the country developed recommendations on how to implement the improved payment systems described in the report.
The Certification Commission for Healthcare Information Technology (CCHIT) has issued a call for public comment on a roadmap for expansion of its healthcare IT certification programs.
The roadmap, which is posted on the CCHIT web site, was drafted in response to requests by stakeholders from a wide variety of healthcare domains. It includes development of several new certification programs for launch in 2010. Two areas already named in previous years, Behavioral Health and Long-Term Care, will be developed as planned. In addition, four new program areas, all of which are optional add-on certifications for Ambulatory EHRs, are proposed: Clinical Research, Dermatology, Advanced Interoperability, and Advanced Quality.
The roadmap identifies additional areas for future consideration, even though programs for them may not be ready for launch in 2010. These include Eye Care, Oncology, Obstetrics/Gynecology, Advanced Security, and Advanced Clinical Decision Support. All the material submitted to CCHIT for review will be posted along with the draft expansion roadmap, and comments will be accepted from Jan. 15 through Feb. 5, 2009. The finalized roadmap will be published in late February.
Go to the CCHIT web site.
Financial challenges continued to rank No. 1 on the list of hospital CEOs’ top concerns in 2008, with patient safety and quality their second most prominent concerns, according to the American College of Healthcare Executives’ (ACHE) annual survey of top issues confronting hospital CEOs. In the survey, ACHE asked respondents to rank 12 issues affecting their hospital in order of importance and to identify specific areas of concern within their top three choices. Seventy-seven percent of respondents cited financial challenges as one of their top three concerns, up from 70 percent in 2007. Forty-three percent identified patient safety and quality as a major concern, while care for the uninsured was cited by 41 percent of respondents.
Within the category of financial challenges, respondents identified Medicaid reimbursement (83%), bad debt (78%), and increasing staff and supply costs (75%) as their top three specific concerns.
The Medical Group Management Association (MGMA) has launched Project SwipeIT, an industry-wide effort calling on health insurers, vendors, and healthcare providers to initiate processes to adopt standardized, machine-readable patient ID cards by Jan. 1, 2010.
Most patient ID cards currently in use have no machine-readable elements. Healthcare providers must typically photocopy the cards for their records. This process is prone to human error, since employees in a doctor’s office or hospital must re-enter demographic and insurance information into their computer systems. Many cards are inconsistently designed and feature photos, illustrations, and dark backgrounds that make legible photocopying difficult. Machine-readable cards, linked to providers’ computer systems via a card reader, would automatically enter patient information correctly and cost-effectively.
MGMA estimates that machine-readable patient ID cards could save physician offices and hospitals as much as $1 billion a year by eliminating unnecessary administrative efforts and denied claims. According to MGMA, a machine-readable card compliant with the mandates of the Workgroup for Electronic Data Interchange (WEDI) costs about 50 cents--just a fraction more than the nonstandardized, plastic or paper cards that most insurers now use. MGMA says that the savings that insurers will see from reduced provider inquiries, claims reprocessing, and labor will far exceed this expense.
Visit the project’s web site.
The American Benefits Council has released a new report calling for the inclusion of healthcare reform as an integral part of economic recovery priorities for the new Obama administration and Congress.
The report, titled Condition Critical: Ten Prescriptions for Reforming Health Care Quality, Cost and Coverage, recommends reform that builds on the existing foundation of employer-based health insurance. It also urges measures to make healthcare services more affordable and of higher quality.
The report’s 10 recommendations include building on what works; maintaining a federal framework for reform; improving the quality and efficiency of health care; improving the transparency of the healthcare system; making health coverage an individual responsibility for all Americans; establishing a minimum standard for coverage; reforming the individual insurance market for those without employer-based coverage; strengthening state safety-net programs; improving tax policy to make coverage more affordable; and enabling employers and employees to develop retiree healthcare solutions.
The Bureau of Labor Statistics (BLS) reports that nonfarm payroll employment declined sharply in December, and the unemployment rate rose from 6.8 to 7.2 percent. Payroll employment fell by 524,000 over the month and by 1.9 million over the last 4 months of 2008.
Health care employment, however, continued to grow in December, adding 32,000 jobs. The bulk of the month’s job gains were in ambulatory services (14,000) and hospitals (12,000). In 2008, health care added 372,000 jobs.
Since the start of the recession in December 2007, the number of unemployed persons has grown by 3.6 million, and the unemployment rate has risen by 2.3 percentage points.
Read the BLS release.
In a unanimous ruling, the California Supreme Court has held that “balance billing” is prohibited under state law.
Under California law, emergency room physicians are statutorily required to provide emergency care to patients without regard to the patient’s ability to pay. HMOs are also statutorily required to pay for emergency care when the patient is one of their members. Disputes arise when there is no advance agreement between an emergency room physician and an HMO regarding the amount of payment for emergency care. Balance billing occurs when an emergency room physician bills a patient for the difference between the bill submitted to the HMO and the payment received from the HMO.
Surveying state legislation and past legal decisions, the court found that balance billing is clearly banned when an HMO is contractually obligated to pay a hospital; that HMOs are obligated to pay a reasonable amount for emergency care provided to their members; and that emergency room physicians have the right to directly sue HMOs for the reasonable value of their services. The patient, however, can not be brought into the dispute between the physician and the HMO, and balance billing is prohibited.
Read the court’s decision.
Current efforts aimed at the nationwide deployment of healthcare IT will not be sufficient to achieve medical leaders' vision of health care in the 21st century and may even set back the cause, says a new report from the National Research Council.
The report, based partially on site visits to eight U.S. medical centers considered leaders in the field of healthcare IT, concludes that greater emphasis should be placed on IT that provides healthcare workers and patients with cognitive support, such as assistance in decision making and problem solving.
The report describes difficulties with data sharing and integration, deployment of new IT capabilities, and large-scale data management. Most importantly, current healthcare IT systems offer little cognitive support; clinicians spend a great deal of time sifting through large amounts of raw data (such as lab and other test results) and integrating it with their medical knowledge to form a whole picture of the patient. Many care providers told the committee that data entered into their IT systems was used mainly to comply with regulations or to defend against lawsuits, rather than to improve care. As a result, valuable time and energy is spent managing data as opposed to understanding the patient.
The Centers for Medicare & Medicaid Services (CMS) has notified more than 3,000 of the nation’s hospitals that they will receive the full payment update for calendar year 2009 as part of the new Hospital Outpatient Quality Data Reporting Program.
The 3,313 successful hospitals represent 99.3 percent of the 3,339 hospitals that participated in the program. Of the remaining 26, which will receive an update reduced by two percentage points, 18 did not report required quality data successfully, while eight did not have a QualityNet Administrator.
The new reporting program began in 2008 as an effort to strengthen the tie between the quality of care furnished to people with Medicare in hospital outpatient departments and the payments hospitals receive for those services. Data culled from the hospital reporting program will help Medicare and the broader healthcare community learn more about the quality of services available to beneficiaries in outpatient care settings and how to improve that care. The program will also give CMS baseline data from which a pay-for-performance outpatient system could be created.
The Department of Health & Human Services (HHS) Office of Inspector General (OIG) has released its annual assessment of the most significant management and performance challenges facing HHS in the coming year. This year’s assessment includes a list of nine top management challenges and related “hot topics” for each challenge.
Included in the list are the importance and challenges of maintaining the integrity of the Medicare program and of the Medicaid and State Children’s Health Insurance Program (SCHIP). The assessment also highlights the need to safeguard the quality of care provided to federal healthcare program beneficiaries and the need to ensure the confidentiality, integrity, and reliability of healthcare IT systems.
The full list of management challenges and hot topics is available on the OIG web site.
A new report from Standard & Poor’s questions whether the Worker, Retiree, and Employer Recovery Act of 2008--an emergency relief measure signed by President Bush on Dec. 23, 2008, to ease some of the mandates of the Pension Protection Act of 2006--will be adequate to solve long-term funding shortages in the pension plans of some not-for-profit hospitals and health systems.
The report notes that the relief measure does not eliminate funding obligations but adjusts payment schedules to mitigate the effects of the recession. This postpones, but does not resolve, the problem of underfunded pension plans.
Standard & Poor’s studied a sample of 24 rated hospitals and health systems with traditional defined-benefit plans. It found that rising discount rates helped produce a relatively benign year for plans in 2008, but it expects overall funding of plans to decline in 2009 as weak investment markets lower the value of plan assets. As asset values fall, funding shortfalls will rise. Some hospitals will likely struggle to make higher contributions because of soft operating results and liquidity declines that began in 2008.
The Centers for Medicare & Medicaid Services (CMS) has announced the final five contractors that will process and pay Medicare claims for healthcare services under the Medicare fee-for-service program.
The new contracts, which will be administered for up to 5 years, will process and pay 36 percent of the national volume of Medicare Part A (hospital insurance) and Part B (medical insurance) claims payments in 14 states, mostly in the South and Midwest. CMS has now met its goal of awarding all 15 Medicare Administrative Contractor (MAC) contracts. The final five Part A and Part B MAC contractors will immediately begin their implementation activities and will assume full responsibility for the claims processing work in their respective jurisdictions no later than March 2010. The five new MACs are: • Noridian Administrative Services, LLC, in Jurisdiction 6 (Illinois, Minnesota, and Wisconsin) • National Government Services in Jurisdiction 8 (Indiana and Michigan) • Cahaba Government Benefit Administrators, LLC, in Jurisdiction 10 (Alabama, Georgia, and Tennessee)• Palmetto Government Benefits Administrators, LLC, in Jurisdiction 11 (North Carolina, South Carolina, Virginia, and West Virginia)• Highmark Medicare Services in Jurisdiction 15 (Kentucky and Ohio)
Get more information on MAC contractors and their jurisdictions.
Health spending in the United States grew 6.1 percent in 2007, to $2.2 trillion or $7,421 per person. This was the slowest rate of growth since 1998 and 0.6 of a percentage point lower than the growth of 6.7 percent in 2006, according to a report by the Centers for Medicare & Medicaid Services. Healthcare spending, however, continues to outpace overall economic growth, which grew by 4.8 percent in 2007.
The slower growth in 2007 was attributed mostly to slower growth in both retail prescription drug spending and Medicare spending associated with administering Medicare benefits. Retail prescription drug spending grew 4.9 percent in 2007, slower than the 8.6 percent growth in 2006. The deceleration in 2007 was the result of several factors, including sustained growth in the generic dispensing rate, slower growth in prescription drug prices, and growing consumer concerns for drug safety.
Spending for most other healthcare services grew at about the same rate or faster than in 2006. Hospital spending, which accounts for about 30 percent of total healthcare spending, grew 7.3 percent in 2007, compared to 6.9 percent in 2006. The 2007 increase was partially driven by strong growth in Medicaid spending. In contrast, Medicare spending growth for hospital services remained stable at 4.6 percent, reflecting slower growth in fee-for-service inpatient and outpatient use, balanced by strong growth in Medicare managed care hospital spending due to an increase in the number of beneficiaries enrolling in Medicare Advantage plans.
The U.S. Department of Health and Human Services (HHS) unveiled a plan that establishes a set of five-year national prevention targets to reduce and possibly eliminate healthcare-associated infections (HAIs)--infections that patients acquire while undergoing medical treatment or surgical procedures.
The Action Plan to Prevent Healthcare-Associated Infections lists a number of areas in which HAIs can be prevented, such as surgical site infections. It also establishes national goals and outlines key actions for enhancing and coordinating HHS-supported efforts. These include development of national benchmarks, prioritized recommended clinical practices, a coordinated research agenda, an integrated information systems strategy, and a national messaging plan.
HHS plans to hold meetings in the spring of 2009 to provide opportunities for public comment on improving and strengthening the plan and sharing opportunities for organizations to become engaged with implementing components of the plan that are consistent with their organizations’ missions.
Read the action plan.
A survey conducted by the Association for Healthcare Philanthropy shows that 73 percent of its members have been negatively affected by the recession, but about half anticipate that they will achieve their giving projections through program adjustments and increased activity.
Of those respondents that have reduced their giving forecasts, 36 percent anticipate delaying or being unable to expand or renovate healthcare facilities. A similar number (35 percent) believe they will have to delay or be unable to fund the purchase of new healthcare equipment. Only 8 percent plan to reduce community services such as free clinics.
About two-thirds of the respondents plan to increase their development efforts. The top three areas of focus for these increased efforts will be planned giving (53 percent), major gifts (47 percent), and donor relations (44 percent).
The Healthcare Association of New York State (HANYS) has released poll results showing that nearly two-thirds of New Yorkers would rather see their taxes raised than close the state budget deficit by cuts to healthcare or education. The poll also shows that by a margin of 79 percent to 17 percent, registered New York voters oppose state budget policies that cut funding for Medicaid.
The poll found that a plurality of voters (37 percent) say New York spends too little on Medicaid, compared to 22 percent who say too much is spent. One in five voters thinks New York spends about the right amount of money on Medicaid.
More than three-quarters of the New Yorkers surveyed in the HANYS poll rate their local hospital as “good” or better, including 45 percent who rate the quality of their local hospital as either “excellent” or “very good.” Only 5 percent rated their local hospital as poor.
Read the poll results.
A new AARP survey examines the healthcare and prescription drug challenges facing Boomers and older Americans in the weakened economy. The poll of Americans age 45-plus shows positive signs that much of the population is embracing healthy habits and practicing wise use of prescription drugs, but finds they can do more to reduce their healthcare bills and improve their health.
The survey showed significant concern among all age groups about future health care bills. More than one in five Americans age 45 to 64 (21 percent) reported being not very or not at all confident that they could afford medical care in 2009. While those 65 and older were less worried, the effects of the down economy were evident. A full 70 percent of those surveyed who are enrolled in the Medicare Part D prescription drug program said their current Part D premium was as much as they could afford, up from 54 percent in a similar 2007 AARP survey.
The survey found the impact of rising healthcare costs is already alarming. Fifteen percent of all respondents said they had cut back on medications or not filled a prescription in the past year because they could not afford it. Such behaviors may increase patients’ risk of developing more significant health problems that require drastic and costly health care later in life.
Read the survey.
The National Conference of State Legislatures (NCSL) reports that state legislatures across the country enacted 31,000 laws in 2008, some of which become effective Jan. 1, 2009. The issues range from healthcare reform to criminal justice to labor practices.
Among the new health-related laws that became effective Jan. 1 are:• A new law by the Connecticut General Assembly requiring health insurance policies in the state to cover physical, speech, and occupational therapy services to treat autism disorders if the policies cover these services for other diseases and conditions. • A new Minnesota law establishing a statewide health improvement program that, among other things, creates healthcare homes, streamlines payments, and sets up an electronic prescription drug program. • Another new law by the Connecticut General Assembly requiring that group comprehensive and health insurance policies extend coverage to children until the age of 26.
Read the NCSL release, which provides links to the legislation.
Low Medicare and Medicaid reimbursements to hospitals and physicians lead to significantly higher health insurance costs for consumers and employers, according to a study released today by Milliman Inc. The report found that annual healthcare spending for an average family of four is $1,788 higher than it would be if Medicare, Medicaid, and private employers paid hospitals and physicians similar rates, with total provider reimbursement unchanged. These underpayments create a payment gap to hospitals and physicians that privately insured employers and consumers must close through a "cost shift" or "hidden tax."
The study measures the cost shift as the difference between actual payment rates and average payment rates for Medicare, Medicaid, and private payers; total payment to hospitals and physicians is held constant. The study does not assess appropriate levels of payment, but rather the disparities among current payment rates.
The study found that cost shifting adds an estimated $1,512, or 10.6 percent, to the average premium for a family of four. Of this amount, employers pay approximately $1,115 and the employee share is $397. Families pay an additional $276 more in coinsurance and deductibles due to the cost-shift. Overall, the cost shift represents 15 percent of the current amount spent by commercial payers on hospitals and physicians. Stated differently, if there were no cost shift, hospital and physician costs for privately insured patients would be 15 percent lower.
The Milliman study was supported by America’s Health Insurance Plans, the American Hospital Association, the Blue Cross and Blue Shield Association, and Premera Blue Cross.
Read the study.
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