Twenty states are suing the Trump administration over Obamacare’s individual mandate — again.
Wisconsin, Texas and several other red states said in a lawsuit filed today that since Congress repealed the individual mandate’s tax penalty for not having coverage, that means the mandate itself — and the whole health care law — is invalid.
The GOP tax law “eliminated the tax penalty of the ACA, without eliminating the mandate itself,” the states argue in a complaint filed today in U.S. District Court in the Northern District of Texas. “What remains, then, is the individual mandate, without any accompanying exercise of Congress’s taxing power, which the Supreme Court already held that Congress has no authority to enact.”
The Supreme Court in 2012 upheld Obamacare’s individual mandate in one of the highest-profile court cases in years. The justices did not agree then with the Obama administration’s main argument that the mandate penalty was valid under the Commerce Clause. But the justices did say that the mandate was a constitutional tax. The ruling riled conservatives who felt that Chief Justice John Roberts bent legal reasoning to preserve Obamacare.
Now, the states want to use that same Supreme Court ruling to take down the Affordable Care Act — which has withstood numerous legal challenges but which over the past year has been undermined by executive and regulatory actions the Trump administration has taken.
The states also argue that since the mandate is unconstitutional, the whole law should go. They note that Obamacare did not have a “severability clause” — a provision that says if one part of the law is struck by the courts, the rest would stand — so that once part of it is struck down, the rest in invalid.
How well are doctors, nurses and other workers at your local hospital vaccinated against the flu?
That depends on the hospital.
According to data from the California Department of Public Health, flu vaccination rates among health care staffers at the state’s acute care hospitals range from a low of 37 percent to 100 percent.
Overall, flu vaccination rates among hospital workers climbed significantly in the past several years — from an average of 63 percent during the 2010-11 influenza season to 83 percent during the 2016-17 season, according to the California Department of Public Health. Vaccination rates for the current season won’t be determined until later this year.
But that general increase masks some big variations. Monrovia Memorial Hospital in Los Angeles, Los Robles Hospital and Medical Center, East Campus and Thousand Oaks Surgical Center in Ventura each reported that fewer than 40 percent of their health care workers received the flu vaccine last year. Representatives from those hospitals did not return repeated calls for comment.
On the other end of the spectrum, Rady Children’s Hospital in San Diego reported that every single person working there got the vaccine.
LOOK UP YOUR HOSPITAL
See flu vaccination rates among health care personnel at general acute care hospitals in California.
California’s flu vaccination policies for hospital workers, and those of many other states, are far from uniform or ironclad. In various states, health care workers have legally challenged hospital requirements for vaccination on religious and seculargrounds. And some unions in California and elsewhere oppose a legal mandate, partly for civil rights reasons.
Public health officials themselves have different takes on the legal requirements for hospital workers. The Centers for Disease Control and Prevention lists California and Massachusetts among the handful of states where the flu vaccination is mandated for health care workers. But the states’ laws allow health care workers to opt out by signing a form declining the vaccine. For that reason, officials from those two states said they do not actually consider the vaccine mandatory.
Colorado law requires hospital health care workers to provide proof of immunization or a doctor’s note providing for a medical exemption, and requires that non-immunized workers wear masks. Hospitals that achieve a 90 percent or higher flu vaccination rate are exempt from these rules, however.
In California, state law requires that hospitals offer the vaccine free of charge. Many hospitals offer vaccines to personnel in the cafeteria, and during day and night shifts. “The key to getting more people vaccinated is to make it more easily accessible for people,” said Lynn Janssen, chief of the California Department of Public Health’s associated infections branch.
She also said many California counties and hospitals have required health care workers to either get the flu vaccine or wear a mask, which can help prevent spreading illness to others.
Partly as a result, nearly a third of the state’s hospitals now have flu vaccination rates above 90 percent.
Vaccination rates vary significantly among different categories of hospital workers, however. Hospital employees had an average vaccination rate of 87 percent statewide in 2016-17, while licensed independent practitioners — including some physicians, advance practice nurses and physician assistants who do not receive paychecks from the hospital — had a rate of just 67 percent.
The CDC recommends that health workers get one dose of influenza vaccine annually, and cites data showing the vaccine in recent years has been to up 60 percent effective — though it was far less so this year. Dr. Bill Schaffner, an infectious diseases professor at Vanderbilt University School of Medicine in Nashville, Tenn., says there are three principal reasons to get vaccinated: to prevent workers from infecting patients, to keep them healthy in order to care for patients and to spare them a bout with the flu.
A 2017 Canadian study, however, suggests that the benefits of health care worker vaccinations have been overstated.
In any case, just because experts say health care personnel should get the vaccine doesn’t mean they will choose to do so.
“In the studies, and also in our experience, it turns out — to everyone’s great surprise — that health care workers are human beings,” Schaffner said. “Some are too busy, some don’t think the flu vaccine is worth it, some don’t like shots. Some are not convinced they can’t get flu from the flu vaccine.” (Experts say they can’t.)
Because of this, Schaffner said, it’s up to hospital leadership to push staffers to get vaccinated. At Vanderbilt University Medical Center, vaccination rates increased from 70 percent to 90 percent once leaders there effectively made the flu vaccine “mandatory,” he said, requiring noncompliant hospital personnel to present vaccine exemption requests to a hospital committee.
Health officials also encourage patients to ask whether their caregivers are vaccinated.
Jan Emerson-Shea, spokeswoman for the California Hospital Association, said her organization would like the flu vaccine to be mandatory for all health care personnel. Independent physicians have proven an especially challenging group to motivate, she said, since hospitals hold little sway over them.
“I, for the life of me, can’t imagine why a physician wouldn’t want to be vaccinated,” she said. “But they make that choice.”
Yet the California Nurses Association strongly opposes making flu vaccines mandatory, said Gerard Brogan, a registered nurse and spokesman for the union.
He said the union does recommend that providers get the vaccine, but it objects to making vaccination a condition of employment. He said some employees have religious issues or safety concerns about the vaccines and “we think that should be respected as a civil rights issue,” he said.
He also called rules requiring unvaccinated providers to wear a face mask “punitive.”
“It’s almost like the scarlet letter to shame you,” he said.
He said the masks can frighten patients — a contention made by a New York union as well. In any case, he said, wearing the masks is not especially effective in stopping the spread of flu (although some researchers say otherwise). Instead, he said, employees should be encouraged to wash hands and to stay home when they are sick.
Too often, he said, nurses are asked to come in to work when they are ill. He said he was not able to find any nurses willing to discuss their decision not to get the flu shot.
Hospitals are disappearing. While they may never completely go away, they will continue to shrink in number and importance. That is inevitable and good.
The reputation of hospitals has had its ups and downs. Benjamin Rush, a surgeon general of the Continental Army, called the hospitals of his day the “sinks of human life.” Through the 19th century, most Americans were treated in their homes. Hospitals were a last resort, places only the very poor or those with no family went. And they went mainly to die.
Then several innovations made hospitals more attractive. Anesthesia and sterile techniques made surgery less risky and traumatic, while the discovery of X-rays in 1895 enhanced the diagnostic powers of physicians. And the understanding of germ theory reduced the spread of infectious diseases.
Middle- and upper-class Americans increasingly turned to hospitals for treatment. Americans also strongly supported the expansion of hospitals through philanthropy and legislation.
Today, hospitals house M.R.I.s, surgical robots and other technological wonders, and at $1.1 trillion they account for about a third of all medical spending. That’s nearly the size of the Spanish economy.
And yet this enormous sector of the economy has actually been in decline for some time.
Consider this: What year saw the maximum number of hospitalizations in the United States? The answer is 1981.
That might surprise you. That year, there were over 39 million hospitalizations — 171 admissions per 1,000 Americans. Thirty-five years later, the population has increased by 40 percent, but hospitalizations have decreased by more than 10 percent. There is now a lower rate of hospitalizations than in 1946. As a result, the number of hospitals has declined to 5,534 this year from 6,933 in 1981.
This is because, in a throwback to the 19th century, hospitals now seem less therapeutic and more life-threatening. In 2002, researchers from the Centers for Disease Control and Prevention estimated that there were 1.7 million cases of hospital-acquired infections that caused nearly 100,000 deaths. Other problems — from falls to medical errors — seem too frequent. It is clear that a hospital admission is not a rejuvenating stay at a spa, but a trial to be endured. And those beeping machines and middle-of-the-night interruptions are not conducive to recovery.
The number of hospitals is also declining because more complex care can safely and effectively be provided elsewhere, and that’s good news.
When I was training to become an oncologist, most chemotherapy was administered in the hospital. Now much better anti-nausea medications and more tolerable oral instead of intravenous treatments have made a hospital admission for chemotherapy unusual. Similarly, hip and knee replacements once required days in the hospital; many can now be done overnight in ambulatory surgical centers. Births outside of hospitals are also increasing, as more women have babies at home or at birthing centers.
Studies have shown that patients with heart failure, pneumonia and some serious infections can be given intravenous antibiotics and other hospital-level treatments at home by visiting nurses. These “hospital at home” programs usually lead to more rapid recoveries, at a lower cost.
As these trends accelerate, many of today’s hospitals will downsize, merge or close. Others will convert to doctors’ offices or outpatient clinics. Those that remain will be devoted to emergency rooms, high-tech services for premature babies, patients requiring brain surgery and organ transplants, and the like. Meanwhile, the nearly one billion annual visits to physicians’ offices, imaging facilities, surgical centers, urgent-care centers and “doc in the box” clinics will grow.
Special interests in the hospital business aren’t going to like this. They will lobby for higher hospital payments from the government and insurers and for other preferential treatment, often arguing that we need to retain the “good” jobs hospitals offer. But this is disingenuous; the shift of medical services out of hospitals will create other good jobs — for home nurses, community health care workers and staff at outpatient centers.
Hospitals will also continue consolidating into huge, multihospital systems. They say that this will generate cost savings that can be passed along to patients, but in fact, the opposite happens. The mergers create local monopolies that raise prices to counter the decreased revenue from fewer occupied beds. Federal antitrust regulators must be more vigorous in opposing such mergers.
Instead of trying to forestall the inevitable, we should welcome the advances that are making hospitals less important. Any change in the health care system that saves money and makes patients healthier deserves to be celebrated.
Dallas-based Tenet Healthcare, which operates 74 hospitals, saw its net loss widen in the fourth quarter of 2017.
The for-profit hospital operator ended the fourth quarter of 2017 with revenues of $5 billion, up from $4.9 billion in the same period of the year prior. On a same-facility basis, patient revenue was up 6.1 percent year over year in the fourth quarter of 2017, with adjusted admissions up 1.3 percent.
After factoring in operating expenses, a $252 million write-down of the company’s deferred tax assets due to the Tax Cuts and Jobs Act, and a $22 million year-over-year increase in noncontrolling interest expense, Tenet reported a net loss of $230 million in the fourth quarter of 2017. That’s compared to the fourth quarter of 2016, when the company posted a $79 million net loss.
To improve its financial position, Tenet launched a $250 million cost reduction initiative last year, which involves divesting hospitals in non-core markets and cutting 2,000 jobs, or about 2 percent of the company’s workforce.
Tenet’s hospital divestiture plan is expected to yield more than $1 billion of proceeds. A presentation published with the company’s fourth-quarter financial results said the hospital divestiture plan is on track. Tenet sold its last two Philadelphia hospitals in January, and the company said it expects to complete the divestiture of 368-bed MacNeal Hospital in Berwyn, Ill., in March.
Tenet is also exploring the sale of Conifer Health Solutions, its healthcare business services subsidiary. The company said in December it expects to decide whether to sell Conifer during the first half of 2018.
Issue: It is widely recognized that social factors, such as unstable housing and lack of healthy food, have a substantial impact on health outcomes and spending, particularly with respect to lower-income populations. For Medicaid, now dominated by managed care, this raises the question of how states can establish managed care rates to sustain investments in social supports.
Goal: To explore practical strategies that states can deploy to support Medicaid managed care plans and their network providers in addressing social issues.
Methods: Literature review, interviews with stakeholders, and analysis of federal regulations.
Findings and Conclusions: We identify the following options: 1) classify certain social services as covered benefits under the state’s Medicaid plan; 2) explore the additional flexibility afforded states through Section 1115 waivers; 3) use value-based payments to support provider investment in social interventions; 4) use incentives and withholds to encourage plan investment in social interventions; 5) integrate efforts to address social issues into quality improvement activities; and 6) reward plans through higher rates for effective investments in social interventions. More needs to be done, however, to assist interested states in using these options and identifying pathways to braid Medicaid dollars with other social services funding.
Introduction
Exhibit 1
State Options and Considerations
1. Classify certain social services as covered benefits under the state’s Medicaid plan
2. Explore the additional flexibility afforded states through Section 1115 waivers
3. Use value-based payment to support investment in social interventions
4. Use incentives and withholds to encourage plan investment in social interventions
5. Integrate efforts to address social issues into quality improvement activities
6. Reward plans with effective investments in social interventions with higher rates
It is now widely recognized that social factors, such as unstable housing, lack of healthy food, unsafe neighborhoods, and unemployment, have a substantial impact on health care outcomes and spending, particularly with respect to lower-income populations.1 Moreover, there is an emerging body of research on which interventions are most likely to result in better outcomes and reductions in spending.2 As the nation’s largest payer for health care services for low-income populations, many of whom have substantial social service needs, Medicaid is front and center when it comes to these issues. State Medicaid agencies are increasingly focusing on how the program can cover and reimburse for nonclinical interventions, particularly in managed care, now the dominant service delivery model in Medicaid.
This report identifies practical strategies that states can deploy to support Medicaid managed care plans and their network providers in addressing social issues. Based on a literature review and on interviews with state officials, health plan leaders, actuarial experts, and other stakeholders, we identify options for states to consider if they are interested in incorporating the cost of social interventions into Medicaid managed care rates (Exhibit 1). While the strategies do not represent a comprehensive solution to the issue of Medicaid’s role in addressing social issues, they are an essential building block.
Background
States face several questions about what role they want Medicaid to play in addressing social issues that directly affect the health of Medicaid beneficiaries and the cost of serving them. Do they want to move their Medicaid programs beyond paying for medical services to tackling affordable housing, economic insecurity, unsafe neighborhoods, and access to adequate and healthy food? In some states, the priority is finding more effective ways to deliver traditional medical care. Other states, particularly those that have implemented an expansion of coverage to low-income adults or are adopting a population health approach to their Medicaid programs, look to their managed care plans and providers to address such issues (Exhibit 2). In all cases, states must evaluate the extent to which federal Medicaid rules permit coverage and payment for discrete nonclinical services.
Exhibit 2
Medicaid Expansion: Implications for the Importance of Addressing Social Determinants of Health
In the states that expanded their Medicaid programs to all adults with incomes below 138 percent of the federal poverty level (31, plus the District of Columbia), newly eligible adults often have extensive social needs. According to research from the Medicaid and Children’s Health Insurance Program Payment and Access Commission, 70 percent are below the federal poverty level, but, even so, only about half receive benefits from the Supplemental Nutrition Assistance Program.a In our interviews with Medicaid directors in expansion states, they reported that gaining these new enrollees has reinforced the importance of Medicaid addressing social issues: first, because of the relatively high prevalence of mental illness and substance abuse among the population,b and second, because of Medicaid’s increasingly important role in the coverage and care of low-income families. Finally, interviewees noted that, as Medicaid coverage became more stable and states and managed care plans began to implement value-based payment policies, plans and providers were better positioned to address the social needs of their enrollees and patients.
Rate-Setting Tools in Context
A Medicaid managed care financing and payment strategy is an essential element, but far from the only required element, of any approach to use Medicaid as a vehicle for addressing social determinants of health. During our interviews, we consistently heard that while there is strong interest in innovative rate-setting options, states have many other challenges they need to tackle for Medicaid to play a role in addressing social issues. These other challenges include the need for more staff with different skills, such as social service experience or actuarial proficiency; a data infrastructure to identify and address social factors; and sufficient time and resources for plans and providers to prepare to address social issues (see Appendix D). While these are important issues, they are not the focus of this report, which addresses options available to states for creating a payment and managed care contracting strategy that supports investments in social interventions.
Medicaid Managed Care Rate-Setting: Rules, Policies, and Procedures
The question at the center of this analysis is how states can support plan investment in social services that improve health outcomes and are cost-effective. In states with Medicaid managed care, this translates into a question of how to set Medicaid managed care capitation rates in such a way that plans are incentivized or required — and, even more importantly, have the resources — to address social issues that directly affect the health outcomes of their members.
The starting point for answering this question is the federal Medicaid managed care rules that require states to ensure that capitation rates are actuarially sound. This means that rates must be sufficient to cover the costs that plans incur to provide covered benefits to their enrollees, as well as related administrative and operational expenses. Notably, capitation rates must be based only on services covered under the state plan and services necessary to achieve mental health parity requirements.3 In other words, states cannot directly build the cost of social support services not covered under the state plan into their capitation rates (Exhibit 3).4
HENRY KOTULA 