Temple will sell Fox Chase Cancer Center


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Philadelphia-based Temple University has signed a binding definitive agreement to sell the Fox Chase Cancer Center and its bone marrow transplant program to Thomas Jefferson University in Philadelphia.

The announcement comes after nearly a year of negotiations. Temple expects to complete the sale of the cancer center and bone marrow transplant program in the spring of 2020.

Temple also entered into an agreement to sell its membership interest in Health Partners Plan, a Philadelphia-based managed care program, to Jefferson. A closing date for the transaction has not yet been determined.

With the agreements in place, Temple and Jefferson are looking for other ways to collaborate. The two organizations are exploring a broad affiliation that would help them address social determinants of health, enhance education for students at both universities, collaborate on healthcare innovation, and implement a long-term oncology agreement that would expand access to resources for Temple residents, fellows and students.

“Healthcare is on the cusp of a revolution and it will require creative partnerships to have Philadelphia be a center of that transformation,” Stephen Klasko, MD, president of Thomas Jefferson University and CEO of Jefferson Health, said in a news release. “For Jefferson, our relationship with Temple will accelerate our mission of improving lives and reimagining health care and education to create unparalleled value.”




Benefit design, higher deductibles will increase bad debt for hospitals


Legislative proposals could reduce bad debt, but would likely introduce additional complexity to billing processes.

Changes in insurance benefit design that shift greater financial responsibility to the patient, rising healthcare costs and confusing medical bills will continue to drive growth in bad debt — often faster than net patient revenue, according to a new report from Moody’s.

Legislative proposals to simplify billing have the potential to reduce bad debt, but the downside for hospitals is that they’ll likely introduce additional complexity to billing processes and complicate relationships with contracted physician groups. A recent accounting change will reduce transparency around reporting bad debt.

Higher cost sharing and rising deductibles are the main contributors to the trend of patients assuming greater financial responsibility, a trend that’s been occurring for more than a decade, and that will further increase the amount of uncollected payments. Hospitals and providers are responsible for collecting copays and deductibles from patients, which may not always be possible at the time of service; the longer the delay between providing service and collecting payment, the less likely a hospital is to collect payment.

On top of that, the higher an individual’s deductible is, the greater the share of reimbursement that a hospital has to collect. The prevalence of general deductibles increased to 85% of covered workers in 2018, up from 55% in 2006, and the amount of the annual deductible almost tripled in that time to an average of $1,573.

Multiple factors are driving the trend toward higher cost sharing, including a desire among employees and employers for stable premium growth despite steadily rising healthcare costs and the growing popularity of high deductible health plans.


Hospitals face an uphill battle when it comes to reducing bad debt. Strategies include point-of-service collections, enhanced technology to better estimate a patient’s responsibility for a medical bill, and offering low-cost financing or payment plans.

A common feature of these approaches is educating patients about what portion of a medical bill is their responsibility, after taking into account the specifics of their insurance plan. But hospitals often find it hard to provide reliable cost estimates for a given service, which can thwart efforts to provide patients with an accurate estimate of their financial responsibility.

One difficulty is that medical bills partly depend on the complexity of service and amount of resources consumed — which may not be known ahead of time. There’s also the need to incorporate specific benefits of the patient’s own insurance plan. A certain amount of bad debt is likely to arise from patients accessing emergency care given the insufficient time to determine insurance coverage.

Another difficulty in billing is surprise medical bills, received by insured patients who inadvertently receive care from providers outside their insurance networks, usually in emergency situations. While the term “surprise medical bills” refers to a specific, narrow slice of healthcare costs, they have become part of the broader debate about the affordability and accessibility of U.S. healthcare.


To minimize surprise bills, Congress is considering proposals to essentially “bundle” all of the services a patient receives in an emergency room into a single bill. Under a bundled billing approach, the hospital would negotiate a set charges for a single or “bundled” episode of care in the emergency room. The hospital would then allocate payments to the providers involved.

This approach, which major hospital and physician trade groups oppose, has the potential to significantly affect hospitals and disrupt the business models of physician staffing companies, according to Moody’s. Many hospitals outsource the operations and billing of their emergency rooms or other departments to staffing companies. Bundling services would require a change in the contractual relationship between hospitals and staffing companies.

Another recent proposal in Congress would require in-network hospitals to guarantee that all providers operating at their facilities are also in network. This approach adds significant complexity because many physicians and ancillary service providers are not employed or controlled by the hospitals where they work. Some hospitals would likely seek to employ more physicians, leading to increases in salaries, benefits and wages expense.


Here come the prediabetics


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Alarming statistics appeared this week in the journal JAMA Pediatrics, based on an analysis conducted by researchers at the Centers for Disease Control and Prevention (CDC) that showed that 20 percent of adolescents (ages 12-18) and 25 percent of young adults (ages 19-34) in the US are now prediabetic. These young people are at substantially increased risk for developing type 2 diabetes, as well as related cardiovascular diseases, as they grow older.

The numbers are a staggering picture of what confronts the American healthcare system as the millennial generation (whose median age is now 30) and the younger “Gen-Z” generation (born after 1997) move closer to their prime care consumption years. These age cohorts are likely to be much more medically complex, and will drive even higher healthcare costs, than previous generations—especially since both of the younger generations are larger than those that preceded them. But the statistics also raise important health policy questions.

To what extent should we “medicalize” prediabetes? In other words, should we begin to flag and treat prediabetes, which is more of a predisposition than an actual medical condition, with medications and interventions? Surely the reimbursement system will create a powerful temptation to do exactly that—at exorbitant cost. Or will we instead focus efforts on “reversing” prediabetes, with more robust attempts to encourage lifestyle changes (diet, exercise) and drive environmental changes (neighborhood walkability, availability and affordability of healthy foods)?

And there’s an information privacy issue looming as well—how will “prediabetics” be flagged, and could prediabetes be viewed as a “pre-existing condition” that might be used in coverage (and even employment) decisions should the regulatory environment change? As much as we focus today on the healthcare impact of the aging Baby Boom generation, we need to get out ahead of some of the issues we’re certain to face as our younger citizens grow older (and sicker).






The health system’s senior vice president of national labor relations said the conflict is resolvable, ‘and there is no reason to strike.’

A five-day strike that was postponed last month after the sudden death of Kaiser Permanente Chairman and CEO Bernard J. Tyson is back on the calendar.

Thousands of psychologists, therapists, psychiatric nurses, and other healthcare professionals plan to strike December 16–20 at more than 100 Kaiser Permanente facilities across California, the National Union of Healthcare Workers (NUHW) said Wednesday.

“Mental health has been underserved and overlooked by the Kaiser system for too long,” said Ken Rogers, PsyD, MEd, a Kaiser Permanente clinical psychologist who serves as a vice president on the NUHW executive board, in a statement released by the union.

“We’re ready to work with Kaiser to create a new model for mental health care that doesn’t force patients to wait two months for appointments and leave clinicians with unsustainable caseloads,” Rogers said. “But Kaiser needs to show that it’s committed to fixing its system and treating patients and caregivers fairly.”

The union accuses Kaiser Permanente of refusing to negotiate unless mental health clinicians agree to “significantly poorer retirement and health benefits” than those received by its more than 120,000 other California employees.

Dennis Dabney, senior vice president of national labor relations and the Office of Labor Management Partnership at the Kaiser Foundation Health Plan and Hospitals, said the parties have been working together with an external mediator in pursuit of a collective bargaining agreement. The union rejected a compromise solution proposed last week by the mediator, Dabney said.

“The only issues actively in negotiation in Northern California are related to wage increases and the amount of administrative time that therapists have beyond patient time,” Dabney said. “We believe these issues are resolvable and there is no reason to strike.”

The mediator’s recommendation includes about 3% in annual wage increases for therapists in Northern California for four years, plus a $2,600 retroactive bonus, Dabney said

“In Southern California, the primary contract concern relates to wage increases and retirement benefits,” Dabney said.

The mediator’s recommendation includes about 3% in annual wage increases for therapists in Southern California for four years, plus a $2,600 retroactive bonus, even though the organization’s therapists in Southern California “are paid nearly 35% above market,” Dabney said.

“Rather than calling for a strike, NUHW’s leadership should continue to engage with the mediator and Kaiser Permanente to resolve these issues,” Dabney said.







New Ulm Medical Center struck a deal with a local payer willing to share the cost of a simple intervention. The arrangement has been paying dividends for seven years.


The intervention slashed PMPM billing by 61% in three years for a small cohort of plan members.

What makes this program atypical is the way the hospital took a broad problem-solving approach while minimizing its expenses.

Patients who use the emergency department at least three times within four months at Allina Health’s New Ulm Medical Center in New Ulm, Minnesota, have their names added to a high-utilization list.

The keeper of that list is Jennifer Eckstein, a licensed social worker who follows up with each patient directly, looking to solve underlying problems that may be driving their frequent ED use. Whether the patients need a primary care physician, a mental healthcare provider, supportive housing, or another solution, Eckstein does her best to address their social determinants of health and steer them away from the ED for non-emergent care.

The intervention is a straightforward concept. Many other hospitals have similarly hired social workers to help meet the needs of these ED frequent flyers. The program at New Ulm Medical Center, in fact, was inspired in part by an earlier and narrower intervention that focused exclusively on mental health needs of ED patients at Allina’s Owatonna Hospital in Owatonna, Minnesota.

But what makes this program a bit different from others is the way New Ulm Medical Center took a broad problem-solving approach while minimizing its expenses. Rather than shouldering the full cost of employing a full-time ED social worker, the hospital partnered with local insurer South Country Health Alliance. They struck a deal and signed a contract agreeing to split the personnel expense 50/50, beginning in 2012.

Allina’s four hospitals in the Twin Cities metro area have regularly staffed social workers in their EDs, too, but none of them fund those positions through cost-sharing arrangements with health plans, according to a spokesperson for the nonprofit health system.

South Country Health Alliance CEO Leota Lind, who has been with the organization since its founding in 2000, says her organization didn’t need much convincing to sign the contract with New Ulm Medical Center. While unmet mental health needs are often a major factor contributing to ED overuse, they are far from the only factor, so the broader approach taken at New Ulm offered a chance to solve a wider range of the challenges that were leading plan members to an ED when they should be seeing a more cost-effective primary care physician instead, Lind says.

“We really just were looking at ways to influence and reduce emergency department visits,” Lind tells HealthLeaders. “By taking that broader scope, it gave us the opportunity to identify what other issues were contributing to that high utilization of the emergency department.”


South Country Health Alliance and New Ulm Medical Center each contribute about $40,000 per year to cover Eckstein’s salary and benefits—which, at about $80,000 per year, are in line with what other hospital social workers earn in total compensation in the Midwest, says Carisa Buegler, MHA, director of operations for the hospital.

Both the hospital and payer say their shared investment has been paying off.

Before the social worker was introduced, a small cohort of 28 South Country Health Alliance plan members who received care in New Ulm Medical Center’s ED generated $731 per member per month (PMPM) in hospital bills, according to Buegler. A year after Eckstein began her work, in 2012, those bills fell to $416 PMPM, then they kept falling. By the end of the third year, in 2014, the 28-patient cohort generated $286 PMPM in bills, Buegler says.

That 61% reduction means the hospital billed the payer nearly $150,000 less in 2014—just for those 28 patients—than it had before the social worker was introduced. By the end of the third year, the cohort’s overall ED utilization was cut in half, and its inpatient admissions fell 89%, Buegler says.

That’s only part of the impact Eckstein’s labor has produced, since she doesn’t work exclusively with South Country plan members. Eckstein, who was hired into the position when it was created, says she helps roughly 150–200 patients per year, regardless of who’s paying for their care. Some needs are easier to meet than others, so she’s built a sense of rapport with some returning patients over the years.

“The good thing is they utilize me now instead of the ER, so when they get into a pickle or if they’re having trouble with something, they call me,” she says.

Across all payers, the intervention has likely been saving $500,000 or more, Buegler says.

The intervention is about more than just money, of course. It aims also to improve clinical care and patients’ quality of life.

“I don’t think the driver was necessarily just cost but appropriate care at the right place, at the right time, with the right kind of provider,” says South Country Health Alliance Chief Medical Officer Brad Johnson, MD.

But the financial implications of this intervention are especially interesting considering the fact that New Ulm Medical Center is spending $40,000 per year on a program that delivers cost-savings to payers while reducing the hospital’s revenue. The immediate financial benefit goes to the payer, not the provider.

The hospital has seen a 20% reduction in its overall ED volumes in the past five years, and that’s likely the direction in which most hospitals’ EDs are headed, which is generally good news, Buegler says. The situation presents a challenge, though, since value-based payment arrangements haven’t matured and proliferated to a point where they can compensate adequately for the trend, she says.

Why, then, would the hospital keep investing in this intervention?

“It’s the right thing to do,” Buegler says. “It’s providing the best level of care to our patients who are coming in the emergency department seeking help and then providing another level of service to those individuals to help them improve their social conditions, that will then help them to improve their health. … It’s really looking at the patient as a whole person.”

There’s also a longer-term business case to be made for the hospital’s continued investment, Buegler says.

“From a financial perspective, we’re preparing for more value-based payment contracts,” she says.

Although risk-based contracts have been arriving more slowly than many industry stakeholders had expected, leaders remain confident that more value-based models are on the way, so it makes sense for hospitals like New Ulm Medical Center to invest in the future it anticipates, Buegler says.


Eckstein is the sole social worker stationed in the ED, but she’s not running a one-woman show.

New Ulm Medical Center has a social worker assigned to its clinic, too, and South Country Health Alliance employs a physician as a community care connector in each of the 11 counties it serves—so Eckstein has multiple partners just outside the ED’s walls.

“By having that hospital social worker work in partnership with the community care connector at the county, they’re able to effectively make referrals and access some of those other types of community supports that have also helped address the issues that individuals may be experiencing as barriers to managing their healthcare,” Lind says.

This idea of bridging the gap between traditional medical care and broader social services has been central to South Country Health Alliance’s mission since it was founded, Lind says.

“We recognized way back then that those other aspects, those other social, environmental aspects of an individual’s life, impact their ability to manage and maintain their healthcare,” she adds. “That’s been a part of our program since the beginning.”

Johnson says this care coordination is a vital component of the local safety net.

“In rural Minnesota,” he says, “there’s lots of opportunities for people that are not savvy users of the healthcare system to fall through the cracks.”






People hate shopping for health insurance


Illustration of a plastic bag with "NO THANK YOU" printed multiple times on it alongside a health plus.

Americans rarely switch to new health plans when the annual insurance-shopping season comes around, even if they could have gotten a better deal, Axios’ Bob Herman reports.

The bottom line: People loathe shopping for health plans, and many are bad at it, for one major reason: “It’s just too hard,” Tricia Neuman, a Medicare expert at the Kaiser Family Foundation, told Bob last year.

Reality check: During any insurance program’s annual enrollment period, most people end up staying with the status quo, if it’s an option, instead of picking a new plan.

  • Fewer than one out of 10 seniors voluntarily switch from one private Medicare Advantage plan to another, according to new research from the Kaiser Family Foundation.
  • The same holds true for Medicare’s private prescription drug plans.
  • Most employers don’t usually change insurance carriers, often out of fear of angering workers, and keep plan options limited.
  • Employees, after several reminders from HR, usually default to what they had.
  • Fewer than half of people in the Affordable Care Act’s marketplaces actively re-enroll in new plans, even though the market was designed for comparison shopping.
  • Medicaid enrollees in some states have no say in the private plans they get.

Between the lines: Buying health insurance — $20,000 decision for the average family — is more complicated than buying furniture.

  • With consumer products, you pretty much know what you’re getting. With health insurance, you’re making an educated guess of how much health care you’ll use, hoping you’ll need none of it.
  • Health insurance terms and policies also are confusing, which turns people off from the shopping process.

The big picture: Shopping for insurance is difficult enough for most people. Shopping for actual doctors, tests and services is even more difficult and less widespread, and likely won’t change if prices are unlocked.