Category Archives: Health Policy

Unprecedented Growth in Healthcare Workforce Demand in the 2020s: US Bureau of Labor Statistics

Posted on by • Posted in Bureau of Labor Statistics, Health Policy, Health System, Hospital, Hospital Industry, Market Trends, Recruiting, Talent Imperative, Talent Management • Leave a comment

https://www.amnhealthcare.com/unprecented-growth-in-healthcare-workforce-demand-in-the-2020s/?utm_source=pardot&utm_medium=email&utm_campaign=hb-09-2019

The latest data from the US Bureau of Labor Statistics portray a very challenging decade ahead for healthcare organizations trying to find the nurses, physicians, and other healthcare professionals they need.

While healthcare shows the fastest and largest new job growth compared to any other industry, the most alarming data may be the projected annual job openings in key professions, which are many times greater than the numbers of new jobs.

The Bureau of Labor Statistics (BLS) Employment Projections states that the aging population of the United States is the reason behind the growth in healthcare employment and job openings: “Increased demand for healthcare services from an aging population and people with chronic conditions will drive much of the expected employment growth.”

Employment in healthcare occupations is projected to grow 14% from 2018 to 2028, much faster than the average for all occupations, adding about 1.9 million new jobs — more than any other industry. Registered nurses, the occupation with the third highest job growth from 2018-2028, are projected to grow from 3,059,800 to 3,431,300, an increase of 371,500 new jobs.

The aging population also is driving retirements in the healthcare industry, which, along with other job separations, is fueling intense growth in job openings in healthcare. The latest projections show an average of 650,300 job openings per year for all healthcare practitioners and technical occupations from 2018-2028. There will be 210,400 nurse job openings each year, which represents an increase of about 6,000 annual nurse job openings a year from the 2016-2026 employment projections.

The tsunami of retirements among Baby Boomer nurses and other practitioners is coupled with immense opportunities to seek new and better jobs in the superheated healthcare jobs marketplace. The result is a huge and growing number of job openings, many of which cannot be filled.

Data from another BLS survey, Job Openings and Labor Turnover Survey, show that job openings outnumber job hires in healthcare by 2:1. There are approximately a half million unfilled healthcare jobs.

The upcoming decade is expected to see a worsening of this problem. By 2030, all Baby Boomers will have reached 65; the generation will be nearing full retirement. By 2035, the number of people over 65 in the United States will be greater than the number under 18 – for the first time in the nation’s history. The result of growth in retirement-age people and relative stasis in the number of young people will be that there will not be enough people to fill the work shoes of retirees – in healthcare and all professions.

 

Is Gun Violence a Public Health Issue?

Posted on by • Posted in 2020 Election Issues, Centers for Disease Control & Prevention (CDC), Gun Violence, Health Policy, Public Good, Public Health, Public Safety • 1 Comment

https://mailchi.mp/burroughshealthcare/february-8-1687741?e=7d3f834d2f

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The United States population is 327 million and there are 393 million guns in this country. The issue of guns and gun control remains one of the nation’s most divisive.

As the Los Angeles Times explains in a recent editorial, “to truly address gun violence, we need to view it through a public health lens — one that reframes the issue as a preventable disease that can be cured with the help of all community members.”

The American Public Health Association (APHA) shared recently that the U.S. has the dubious distinction of “outpacing” any other country with a gun violence burden. Highly publicized statistics vary from source to source, but they do bear repeating, beginning with the fact that:

  • 82 percent of all firearm deaths in nearly two dozen populous, high-income countries—

including Australia, France, Italy, Spain and the United Kingdom — occur in the U.S.

  • 91 percent of children ages 0-14 killed by firearms in this group of nations were from the U.S.

The Gun Violence Archive stays up to date on this year’s sobering victim numbers, already standing at:

Total incidents:         36,390
Deaths:                       9,578
Injuries:                       19,102
Mass shooting:               268

Ways but No Will

Having dedicated himself to the science of gun violence, health policy professor David Hemenway, Ph.D., of the Harvard T. H. Chan School of Public Health says we’re all watching too much media where “guns are the solution to so many problems. The good guy with the gun is the big hero.”

In real life, guns are not solutions to problems. The myth is imposed early and continues to be perpetuated. Children are exposed to 90 percent of movies, 68 percent of video games and 60 percent of shows that include violence, Common Sense Media said six years ago. Current numbers are surely much higher.

Dr. Hemenway also balks at the old “we’ll be able to protect ourselves when that intruder comes into our space” argument. It takes lots of training, repetition and practicing, over and over, to do the right thing right, he says, and most don’t have time or resources to get that — right.

Although the United States is an international mega-power, it as much to learn, Dr. Hemenway says, noting that “every other country has shown us the way to vastly reduce our problems.” That means if other countries can get control of gun reasonability — as New Zealand did in a hurry following its first mass shooting — we can, too.

Repeated surveys of Americans say they favor universal background checks. As recent history has shown, whether or not that will come to fruition still remains unanswered.

Prevent Rather Than Repair

The idea of “community” as it relates to “public” means motivating responsible gun owners, says Dr. Hemenway, citing his colleague Cathy Barber, M.P.A., at T.H. Chan’s Means Matter campaign. She collaborates on a number of pertinent issues with gun owners, advocates and trainers, as well as gun shop owners.

Dr. Hemenway’s must-do list includes licensing of gun owners and all that entails, including strong background checks, and only allowing firearm sales to a licensed owner. He also recommends a federal agency to oversee the massive gun issue — a heretofore novel and yet seemingly sound idea.

The medical community has taken its stand on the public health effects of gun violence after frequently describing for the rest of us in riveting detail what it’s like to treat victims of shootings. Formally, members have established the nonprofit American Foundation for Firearm Injury Reduction in medicine (AFFIRM), with more than 40,000 healthcare colleagues.

The group seeks to inform medical protocols for their peers on the frontlines of gun violence, and to engage other first responders and stakeholders, as well as to educate and inform the public. They say they’d rather prevent than repair, and they worry about a culture of indifference and acceptance — of normalization that leads to divisiveness in this nation.

Meeting of the Minds Needed

It’s tough to solve a problem if stakeholders can’t come together to share ideas and solutions, the kind of proactive collaboration that provided results and conclusions around seat belts and smoking.

So why doesn’t the federal government jump headlong into gun violence research, specifically the Centers for Disease Control and Prevention (CDC) and the National Institutes of Health (NIH)? The Dickey Amendment came to fruition in the early 1990s when gun violence did become a public health issue.

The National Rifle Association (NRA) said then that the CDC was biased against guns, and attracted Congressional support that basically eliminated any funding “to advocate or promote gun control”: That meant no studies related to firearms, and in 2011, the amendment reached to the NIH. After the Sandy Hook school shooting, President Obama told the CDC that the Dickey Amendment shouldn’t completely ignore funding for gun violence research, but Congress stopped it nonetheless. Currently, the amendment isn’t really in effect but there’s still no funding.

To that end, early this year, Rep. Carolyn Maloney (D-NY) introduced H.R. 674 and Sen. Edward Markey (D-MA) introduced S.184, the Gun Violence Prevention Research Act of 2019, which was referred to the Subcommittee on Health, where it’s been languishing. It would provide CDC funding to study gun violence for the next five fiscal years.

Random Attacks Are Few
 
If the United States is unable to tackle more research into gun violence, that hasn’t stopped smaller, independent studies, like one from the state of Utah. It published a report in 2018 with the T.H. Chan School, looking at suicide and firearm injury. It was supported by both parties, and by gun rights champions.

The results showed that 87 percent of those who died by suicide could have passed a background check and that Utahns with mental health or drinking issues weren’t properly storing or locking up guns. The most surprising fact: Those random attacks that people are warned about as reasons to carry guns occurred only three or four times a year.

So with all we know and all that’s yet to be known if more scientific research is conducted, the following have been suggested as remedies to the gun violence epidemic. The solutions run the gamut from more basic to creative:

  • Universal background checks
  • An assault weapons ban, along with a ban on high-capacity magazines
  • Mandatory license needed to buy a gun
  • Mandatory gun registration
  • Mandatory training for owners
  • Waiting periods for firearm purchase
  • More taxes on gun manufacturers
  • Safe and secure gun storage
  • No sales to anyone on a terrorist watch list
  • No sales to anyone convicted of a felony
  • Red-flag law: Families can ask a judge to temporarily prohibit an individual from possessing a firearm if those parties believe that individual might commit violence.

Also mentioned as possible solutions:

  • The federal government could buy the domestic handgun manufacturing industry.
  • It could ban the import of all handguns.
  • It could offer cash buybacks for all handguns in circulation.
  • A person buying a gun would have to enlist for military reserve service.

Scientific American sees it this way, opining that we just don’t know enough about gun violence perpetrators and we should.

Did they get firearms legally, or how did they get them?

Are our current laws being used to disarm dangerous people?

What do we do about the proliferation of underground gun markets?

How can we better evaluate violence prevention policies and programs, as in “Do they work?”
 
As the editorial board notes, research doesn’t infringe on Second Amendment rights, but it does support those other, unalienable rights we are all due, thanks to the Declaration of Independence. Don’t forget “Life, Liberty and the pursuit of Happiness.”

Sutter Antitrust Class Action Could Upend Industry Consolidation

Posted on by • Posted in Antitrust, Federal Trade Commission (FTC), Health Policy, Health System, High Deductible Health Plans, High Premiums, High Prices, Hospital, Hospital Industry, Lawsuit, Market Consolidation, Market Power, Monopoly, Monopoly Behavior, Out of Pocket Expenses, Out-of-Network • Leave a comment

https://news.bloomberglaw.com/health-law-and-business/sutter-antitrust-class-action-could-upend-industry-consolidation

Health-care consolidation and antitrust allegations are the focus of litigation that alleges Sutter Health Systems uses its Northern California dominance to force higher fees out of employer-funded health plans and consumers.

Jury selection begins Sept. 23 in San Francisco in a case that could translate into more than a billion-dollar liability for California’s third-largest hospital system. Sutter denies the allegations.

Employers, payors, and the health-care industry are closely watching the case. Success in California could spill into other states and undermine consolidation efforts by other health-care providers, observers said.

“If I’m a system somewhere else and these guys lose, these class-action lawyers I assume are going to start putting pins in the map around the country and say, ‘OK let’s go look at Utah, Florida, other parts of California’” that have dominant players, said Glenn Melnick, a health-care economist at the University of Southern California. “They have a template now.”

Total Revenue Hit $13 Billion in 2018

Sutter Health is a California behemoth, consisting of 24 acute care hospital facilities, 36 ambulatory surgery centers, nine cancer centers, six specialty care centers, nine major physician organizations, with 12,000 physicians and 53,000 employees located in 19 counties in Northern California. The system reported $13 billion in revenue in 2018.

“There is no evidence that Sutter has hurt competition, as demonstrated by the fact that new hospitals continue to open and existing facilities continue to expand in markets that Sutter Health serves, including in the San Francisco Bay Area and the greater Sacramento region,” Sutter said in a statement.

Northern California has experienced more rapid consolidation of hospital, physician, and insurance markets from 2010 to 2016 than Southern California, University of California Berkeley researchers found. And inpatient prices were 70% higher, outpatient prices 17%-55% higher depending on physician specialty, and Affordable Care Act premiums 35% higher in the northern part of the state.

Sutter inflated prices by an average 15.5% between 2003 and 2016, a United Food & Commercial Workers & Employers Benefit Trust expert analysis said. The UFCW trust sued Sutter first, followed by the state. For trial purposes, the court joined California’s lawsuit with the UFCW class action.

The inflated prices translated into $756 million in overcharges, the state and class members allege. More than 90% of class members for which measurements were available paid higher average prices at Sutter than class members paid for services at other California hospitals, they said.

Patients Protected, Sutter Says

The hospital system says its offerings shield patients from unforeseen expenses.

“Our broad provider network gives patients greater choice and predictability and protects patients from surprise billing. It also prevents patients from paying more in co-pays and deductibles for out-of-network doctor and hospital visits,” Sutter’s statement said.

Treble damages and attorneys’ fees are available if the UFCW and state win under the Cartwright Act, California’s antitrust law. The union trust fund, representing a class of large California employers who self insure their health-care costs, seeks damages from the jury while the California Attorney General wants to stop the practices alleged.

Jury selection is set for Sept. 23-24 with a two-week break while the parties argue over issues including sealing contracts negotiated with third parties including Anthem Inc., Blue Shield of California Inc., United Healthcare Services Inc., Teamsters Benefit Trust, Apple Inc., and HealthNet of California Inc. The trial is expected to last 60-90 days.

Consolidation Concerns

Health-care costs are one of the most important concerns in the U.S., said Jaime King, associate dean of the University of California Hastings School of Law and director of the Concentration on Law and Health Sciences.

“I know that attorneys general in other states are paying very close attention to what’s happening because concentration is not something that is just happening in California—it’s happening all over the country. If successful we will start to see a rollout of lots of similar cases across country,” King said.

“I think we will see ripple effects that go well into the future,” she said.

The case has implications especially in Northern California and could have legs elsewhere, Attorney General Xavier Becerra (D) said.

“Does this have an impact outside California? I would say that most everything that California does has an impact on this country and dare say the world. We hope that in our effort to pursue lower costs and higher quality of care in health care that the beneficiaries are not just Californians but people throughout the country,” Becerra said.

 

 

 

Hospital Giant Sutter Health Faces Legal Reckoning Over Medical Pricing

Posted on by • Posted in ACA, Antitrust, Competition, Federal Trade Commission (FTC), Health Policy, Health System, High Deductible Health Plans, High Premiums, High Prices, Hospital, Hospital Industry, Lawsuit, Limited Competition, Market Consolidation, Market Power, Monopoly, Monopoly Behavior, Out of Network, Out of Pocket Expenses, Out-of-Network, Payer Contracting • Leave a comment

https://khn.org/news/sutter-health-antitrust-lawsuit-hospital-consolidation-medical-pricing/?fbclid=IwAR25Fe5xyq6Ne2lq_tuTo-r5ft4mUaLBLN7TLaMIo_cl5gJ59lMBNXwB33A

Economists and researchers long have blamed the high cost of health care in Northern California on the giant medical systems that have gobbled up hospitals and physician practices — most notably Sutter Health, a nonprofit chain with 24 hospitals, 34 surgery centers and 5,000 physicians across the region.

Now, those arguments will have their day in court: A long-awaited class-action lawsuit against Sutter is set to open Sept. 23 in San Francisco Superior Court.

The hospital giant, with $13 billion in operating revenue in 2018, stands accused of violating California’s antitrust laws by leveraging its market power to drive out competition and overcharge patients. Health care costs in Northern California, where Sutter is dominant, are 20% to 30% higher than in Southern California, even after adjusting for cost of living, according to a 2018 study from the Nicholas C. Petris Center at the University of California-Berkeley cited in the complaint.

The case was initiated in 2014 by self-funded employers and union trusts that pay for worker health care. It since has been joined with a similar case brought last year by California Attorney General Xavier Becerra. The plaintiffs seek up to $900 million in damages for overpayments that they attribute to Sutter; under California’s antitrust law, the award can be tripled, leaving Sutter liable for up to $2.7 billion.

The case is being followed closely by industry leaders and academics alike.

“This case could be huge. It could be existential,” said Glenn Melnick, a health care economist at the University of Southern California. If the case is successful, he predicted, health care prices could drop significantly in Northern California. It also could have a “chilling effect” nationally for large health systems that have adopted similar negotiating tactics, he said.

The case already has proved controversial: In November 2017, San Francisco County Superior Court Judge Curtis E.A. Karnow sanctioned Sutter after finding it had intentionally destroyed 192 boxes of documents sought by plaintiffs, “knowing that the evidence was relevant to antitrust issues.” He wrote: “There is no good explanation for the specific and unusual destruction here.”

Antitrust enforcement is more commonly within the purview of the Federal Trade Commission and U.S. Department of Justice. “One of the reasons we have such a big problem [with consolidation] is that they’ve done very little. Enforcement has been very weak,” said Richard Scheffler, director of the Nicholas C. Petris Center. From 2010 to 2017, there were more than 800 hospital mergers, and the federal government has challenged just a handful.

“We feel very confident,” said Richard Grossman, lead counsel for the plaintiffs. “Sutter has been able to elevate their prices above market to the tune of many hundreds of millions of dollars.”

Or, as Attorney General Becerra put it at a news conference unveiling his 2018 lawsuit: “This is a big ‘F’ deal.”

Sutter vigorously denies the allegations, saying its large, integrated health system offers tangible benefits for patients, including more consistent high-quality care. Sutter also disputes that its prices are higher than other major health care providers in California, saying its internal analyses tell a different story.

“This lawsuit irresponsibly targets Sutter’s integrated system of hospitals, clinics, urgent care centers and affiliated doctors serving millions of patients throughout Northern California,” spokeswoman Amy Thoma Tan wrote in an emailed statement. “While insurance companies want to sell narrow networks to employers, integrated networks like Sutter’s benefit patient care and experience, which leads to greater patient choice and reduces surprise out-of-network bills to our patients.”

There’s no dispute that for years Sutter has worked aggressively to buy up hospitals and doctor practices in communities throughout Northern California. At issue in the case is how it has used that market dominance.

According to the lawsuit, Sutter has exploited its market power by using an “all-or-none” approach to contracting with insurance companies. The tactic — known as the “Sutter Model” — involves sitting down at the negotiating table with a demand: If an insurer wants to include any one of the Sutter hospitals or clinics in its network, it must include all of them. In Sutter’s case, several of its 24 hospitals are “must-haves,” meaning it would be almost impossible for an insurer to sell an insurance plan in a given community without including those facilities in the network.

“All-or-none” contracting allows hospital systems to demand higher prices from an insurer with little choice but to acquiesce, even if it might be cheaper to exclude some of the system’s hospitals that are more expensive than a competitor’s. Those higher prices trickle down to consumers in the form of higher premiums.

The California Hospital Association contends such negotiations are crucial for hospitals struggling financially. “It can be a great benefit to small hospitals and rural hospitals that don’t have a lot of bargaining power to have a larger group that can negotiate on their behalf,” said Jackie Garman, the CHA’s legal counsel.

Sutter also is accused of preventing insurers and employers from tiering benefits, a technique used to steer patients to more cost-effective options. For example, an insurer might charge $100 out-of-pocket for a procedure at a preferred surgery center, but $200 at a more expensive facility. In addition, the lawsuit alleges that for years Sutter restricted insurers from sharing information about its prices with employers and workers, making it nearly impossible to compare prices when selecting a provider.

Altogether, the plaintiffs allege, such tactics are anti-competitive and have allowed Sutter to drive up the cost of care in Northern California.

Hospitals in California and other regions across the country have watched the success of such tactics and taken note. “All the other hospitals want to emulate [Sutter] to get those rates,” said Anthony Wright, executive director of the advocacy group Health Access.

A verdict that finds such tactics illegal would “send a signal to the market that the way to compete is not to be the next Sutter,” said Wright. “You want them to compete instead by providing better quality service at a lower price, not just by who can get bigger and thus leverage a higher price.”

Along with damages, Becerra’s complaint calls for dismantling the Sutter Model. It asks that Sutter be required to negotiate prices separately for each of its hospitals — and prohibit officials at different hospitals from sharing details of their negotiations. While leaving Sutter intact, the approach would give insurers more negotiating room, particularly in communities with competing providers.

Consolidation in the health care industry is likely here to stay: Two-thirds of hospitals across the nation are part of larger medical systems. “It’s very hard to unscramble the egg,” said Melnick.

California legislators have attempted to limit the “all or nothing” contracting terms several times, but the legislation has stalled amid opposition from the hospital industry.

Now the courts will weigh in.

 

 

 

Paying for healthcare shouldn’t bankrupt families

Posted on by • Posted in 2020 Election Issues, ACA, Bad Debt Expense, Bankruptcy, Essential Health Benefits, Health Insurance Coverage Adequacy, Health Policy, High Deductible Health Plans, High Premiums, High Prices, Out of Pocket Expenses, Out-of-Network, Preexisting Conditions, Short Term Health Insurance, Surprise Bills • Leave a comment

https://www.modernhealthcare.com/opinion-editorial/paying-healthcare-shouldnt-bankrupt-families?utm_source=modern-healthcare-daily-finance&utm_medium=email&utm_campaign=20190923&utm_content=article4-readmore

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Healthcare costs in the U.S. are too high. Americans struggle to afford basic needs like prescription drugs and too often face crushing surprise bills after undergoing necessary medical procedures. Seniors in particular feel the weight of health expenses when they discover that the Medicare benefits they earned don’t always provide sufficient coverage.

While the Affordable Care Act instituted protections for Americans with pre-existing conditions, guaranteed essential health benefits and made some progress in lowering patients’ costs, those advancements are under attack in the courts and through regulatory actions. I chair the House Ways and Means Committee, which has jurisdiction over a great deal of our nation’s healthcare system, including Medicare. Under Democratic leadership, we are fighting to bring down healthcare costs and preserve critical existing health protections.

Our committee hit the ground running this year. The first hearing I convened as chairman focused on protecting Americans with pre-existing conditions. Nearly 130 million Americans have a pre-existing condition—anything from asthma to cancer to diabetes. Thanks to the ACA, insurance companies can no longer refuse to cover these individuals. The hearing shed light on the importance of this safeguard and the ways it provides Americans with greater peace of mind and financial security.

We also highlighted the immense pain families will endure if 18 Republican state attorneys general succeed in their case to repeal the law.

House Democrats, along with Democratic state attorneys general, jumped into this court battle and continue to defend the millions of Americans with health conditions from discrimination and financial ruin.

We also took concrete steps to increase transparency and lower drug prices. Ways and Means advanced legislation that sheds light across the healthcare supply chain—from pharmaceutical manufacturers to pharmacy benefit managers—to help reduce costs for families. More can be done. In the coming months, the committee will consider legislation to improve the Medicare Part D program, establishing an out-of-pocket cap on expenses for beneficiaries. This would lower costs for seniors and save taxpayers money.

Part D reform is just one way to improve Medicare for beneficiaries. Many seniors aren’t aware that Medicare does not cover routine vision, hearing or dental exams. I will work to change that. Helping seniors access the glasses, hearing aids or dental care they need will save them money on the front end. This coverage will also prevent the trauma and expense of falls or other related health problems that could arise down the road as a result of inadequate services.

Some of the most jarring and devastating medical costs Americans encounter are surprise medical bills. Ways and Means plans to tackle this problem too. We are crafting legislation now that will help patients avoid the huge expenses that follow inadvertently being treated by out-of-network providers.

Healthcare is a necessity and it’s a human right. Paying for it shouldn’t bankrupt families. We can lower patient costs without stifling medical innovation or throwing hospitals into turmoil. It’s possible to achieve commonsense solutions that strengthen our nation’s healthcare system while reducing the burden on consumers.

 

Critical Steps for a Hospital Turnaround

Posted on by • Posted in Board, C-Suite, CEO, Chief Executive Officer (CEO), Chief Financial Officer (CFO), Health Policy, Hospital, Hospital Bankruptcy, Hospital Industry, Leadership, Leadership Alignment, Leadership Implementation, Leadership Transition, Strategy, Turnaround, Turnaround Plan • Leave a comment

https://www.modernhealthcare.com/hospitals/critical-steps-hospital-turnaround

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Operational changes can improve a hospital’s performance and prospects, but time is of the essence.

The challenges many community hospitals face have become so unrelenting as to threaten long-term financial viability. It’s important that this threat be met with prompt action and operational changes that can improve the immediate situation as well as sustainability. A formal turnaround plan includes analyses and actions, and becomes a roadmap to redirect hospitals and help them stay on track to serve as community resources for years to come.

What prevents some struggling hospitals from getting an earlier start on a turnaround plan?

JK: Leaders from ailing community hospitals sometimes don’t recognize the severity of their problems or that certain indicators call for quick, corrective action. Some common alarm signals that leaders may tune out at first include a downward trend of days cash on hand, shifts in patient volume across the delivery spectrum, medical staff dissatisfaction or defection, and even bond covenant concerns. Recognizing that problems need to be addressed and changes must be made is the first step toward improvement.

Once it’s clear that “business as usual” isn’t working, how does the turnaround process start?

JK: Typically, the process starts with an operational assessment to evaluate strategy, operations, supply chain, revenue cycle and leadership with the aim of reducing costs and increasing revenue—the tried-and-true formula for financial solvency. The analysis includes a review of data and documents, as well as interviews with board, executive and physician leaders. The process reveals any organizational problems or vulnerabilities that aren’t immediately apparent, and it forms the basis for a turnaround plan, including a detailed action plan. An open mind and fresh perspective are important to be able to see options to go beyond operations as they have always been.

What are some of the key areas an operational assessment looks at for potential savings and cost reduction?

JK: Almost every hospital has room to improve staff productivity. Labor is a hospital’s greatest expense, so optimizing productivity by having the right number and mix of staff can make a big impact. Community hospitals that do not have a productivity tool to achieve and maintain the right staffing levels can typically find savings of 15 to 20 percent in salaries and benefits by implementing a tool. In those hospitals where there’s already some productivity monitoring, implementing a more effective tool or improving processes can result in 5 to 10 percent savings. After labor, supply costs are the second highest expense for a hospital, so that’s another key focus area for cost reduction and savings. Industry benchmarks show that many community hospitals have an opportunity to reduce supply costs by as much as 20 percent.

Assessing revenue cycle is also imperative to help identify, monitor and collect every dollar a hospital is due. Gains can be made in this area by renegotiating health plan contracts, streamlining billing for faster payment, auditing medical record coding and reviewing the chargemaster.

Why do the early stages of a turnaround include benchmarking?

JK: Hospitals can potentially identify significant cost-saving opportunities by comparing themselves to hospitals of similar size and volume. Comparing clinical, operational and financial data also identifies areas for improvement and where to allocate time and money for improvement initiatives. For example, a CHC-managed hospital that recently underwent a successful turnaround had discovered through benchmarking that its staff ratios were higher and its benefits were more expensive compared to similar hospitals. This information prompted leaders to take a closer look at the hospital’s situation, and they found it made sense from a sustainability perspective to downsize staff and bring benefit packages to competitive levels. These actions slashed the hospital’s annual expenses by $5.3 million.

To support and sustain a turnaround effort, who needs to be involved?

JK: It’s a collaborative process requiring the participation of the board of trustees, executive leaders, physician leaders, and in many cases an outside management firm to evaluate the situation and develop a specific plan of action. As we discussed, leaders of struggling hospitals usually see the need for improvement but don’t recognize the severity of their situation. Because of that blind spot, it’s often external stakeholders or bondholders who set corrective action in motion by seeking outside assistance.

 

Trial approaching in Sutter Health antitrust case

Posted on by • Posted in ACA, Antitrust, Competition, Federal Trade Commission (FTC), Health Policy, Health System, High Deductible Health Plans, High Premiums, High Prices, Hospital, Hospital Industry, Lawsuit, Market Consolidation, Market Power, Mergers & Acquisitions, Monopoly, Monopoly Behavior, Non-Profit Healthcare Industry, Operating Income, Operating Margin • Leave a comment

https://www.modernhealthcare.com/legal/trial-approaching-sutter-health-antitrust-case?utm_source=modern-healthcare-daily-finance&utm_medium=email&utm_campaign=20190923&utm_content=article1-readmore

Spurred in part by the Affordable Care Act, hospitals across the country have merged to form massive medical systems in the belief it would simplify the process for patients.

But a simpler bill doesn’t always guarantee a cheaper bill.

That’s a key issue in an antitrust lawsuit against one of California’s largest hospital systems set to begin Monday.

About 1,500 self-funded health plans have sued Sutter Health, a system that includes 24 hospitals across Northern California. The case has dragged on since 2014, but it picked up steam last year when Attorney General Xavier Becerra filed a similar lawsuit. The cases have been combined and jury selection begins Monday. Opening arguments are scheduled for October.

The lawsuit alleges Sutter Health gobbled up competing medical providers in the region and used its market dominance to set higher prices for insurance plans, which means more expensive insurance premiums for consumers.

Becerra points to a 2018 study that found unadjusted inpatient procedure prices are 70% higher in Northern California than Southern California. The lawsuit notes Sutter Health’s assets were $15.6 billion at the end of 2016, up from $6.4 billion in 2005.

“We never meant for folks to use integration to boost their profits at the expense of consumers,” Becerra said.

It’s rare for antitrust lawsuits of this size to go to trial because the law allows for triple damages — a prospect that often spooks companies into settling outside of court to avoid an unpredictable jury. Health plans in this case are asking for $900 million in damages, meaning Sutter Health could take a nearly $3 billion hit.

Atrium Health, a North Carolina-based hospital system, settled a similar anti-trust lawsuit with the federal government last year. And CHI Franciscan, a health system based in Washington state, also settled similar claims in March that had been brought by the state.

But Sutter Health is fighting the case. The company says the lawsuit is not about its prices, but about insurance companies who want to maximize their own profits. Sutter Health officials insist the company faces fierce competition, vowing to detail in court the expansion of other health systems in the San Francisco Bay Area and the Sacramento Valley.

Four Sutter Health hospitals had operating losses in 2018, totaling $49 million.

“The bottom line is that this lawsuit is designed to skew the healthcare system to the advantage of large insurance companies so they can market inadequate insurance plans to Californians,” said Sutter Health Director of Public Affairs Amy Thoma Tan.

At issue are several of Sutter Health’s contracting policies that Becerra says have allowed the company to “thoroughly immunize itself from price competition.”

One way insurance companies keep costs down is to steer patients to cheaper health care providers through a variety of incentives. Becerra says Sutter Health bans insurance companies from using these incentives, making it harder for patients to use their lower-priced competitors.

Becerra also says Sutter has an “all or nothing” approach to negotiating with insurance companies, requiring them to include all of the company’s hospitals in their provider networks even if it doesn’t make financial sense to do so.

The case was originally filed by a trust of Northern California’s largest unionized grocery companies in 2014. A representative for the trust said it was “unknowingly forced to pay Sutter’s artificially high prices.”

But the company says these contracting practices are designed to protect patients. People often are unable to pick which hospital they go to in a medical emergency, which can lead to surprise bills when they learn a hospital or doctor was not in their network.

Jackie Garman, lawyer for the California Hospital Association, said these contracting practices are standard at a lot of hospitals. If the lawsuit is successful, she said it could “disrupt contracting practices at a lot of other systems.”

But the consequences of not bringing the lawsuit could be greater, Becerra said.

“We are paying every time we allow an anti-competitive behavior to drive the market,” he said.

 

 

 

On same day of hospital concentration study, AMA says payers are the ones with less competition

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https://www.beckershospitalreview.com/payer-issues/on-same-day-of-hospital-concentration-study-ama-says-payers-are-the-ones-with-less-competition.html?oly_enc_id=2893H2397267F7G

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In 2018, 75 percent of commercial health insurance markets were highly concentrated, according to a study published by the American Medical Association.

For its study, AMA analyzed market concentration in 382 metropolitan areas across the nation. AMA estimated that 73 million Americans with commercial health plans live in highly concentrated markets and don’t have many health plans to choose from. 

“Americans in three-quarters of commercial health insurance markets have a limited number of health insurers from which to choose,” AMA President Patrice Harris, MD, said in a prepared statement. “In almost half of metropolitan areas, a single health insurer has 50 percent or more of the market, and patients are not benefiting from this degree of market power. While health insurers grow corporate profits, networks are too narrow, premiums are too high, and benefits are too watered down.”

The study was published the same day the Health Care Cost Institute published an analysis finding a growing number of metropolitan areas have highly concentrated hospital markets. HCCI found that by 2016, hospital markets in the majority (72 percent) of 112 metro areas the institute studied were highly concentrated. HCCI said this “reflects the fact that most metros became increasingly concentrated over time.”

Read the full AMA study here.

 

Federal Reserve announces 2nd consecutive rate cut

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https://www.axios.com/federal-reserve-rate-cut-77c504c1-1bed-4336-9c37-490a3452a54f.html?stream=top&utm_source=alert&utm_medium=email&utm_campaign=alerts_all

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The Federal Reserve cut interest rates by a quarter point on Wednesday, bringing the target range for the benchmark Fed Funds rate to 1.75%–2%.

Why it matters: The Fed’s 2nd consecutive rate cut reflects worries about the U.S. economy. The trade war and slowing growth around the world have made corporate executives more worried than they’ve been in years.

  • The move prompted a near-immediate response from President Trump, who called chair Powell a “terrible communicator.” The president has demanded in a series of tweets that the Fed cut interest rates more aggressively.

The big picture: Speaking at a press conference, Powell again cited the trade war as a key risk to the economic outlook. “Our business contacts around the country have been telling us that uncertainty about trade policy has discouraged them from investing in their businesses,” Powell said.

  • Still, new projections showed a division among Fed officials about whether more rate cuts are warranted this year.
  • Powell did note that if “the economy does turn down, then a more extensive sequence of rate cuts could be appropriate.”

Powell also acknowledged the liquidity shortfall in money markets that has forced the Fed to intervene — something that before this week hadn’t happened since the financial crisis.

  • In response to the drama in the short-term funding markets, Powell suggested that the Fed may increase the size of its balance sheet through “organic growth” earlier than expected.

 

 

 

 

Report: Climate changes costing U.S. billions in health spending

Posted on by • Posted in Climate Change, Environmental Protection Agency (EPA), Health Policy, Medicaid, Medicare, Public Good, Public Health, Public Safety • Leave a comment

https://www.fiercehealthcare.com/hospitals-health-systems/report-climate-changes-costing-u-s-billions-health-spending?mkt_tok=eyJpIjoiT1dJNE5tUTFZV0k1TVdRNCIsInQiOiJMakFtS1IzZmxaRDlQNUtjdFdMUHVYUFdBd1wvXC9EZFR3ekhHU3ZsYVNib2t3bTlEb0Z2bklLZndEZXFOTjZ1RVZ0bURYMXI5dGFNcW92SXFYV25HTVh4d01tNEY4YkVCUnBMamhpbllXSytVTW5ybGJ1OTh0UjJmVDRmSWJ6c1wveCJ9&mrkid=959610

From deaths and injuries caused by extreme heat and stronger storms to longer growing seasons linked to an increased risk of mosquito- and tick-borne illnesses and wildfires, the healthcare impacts of climate change are costing the U.S. billions, a new analysis found.

Case in point: An analysis of a single year—2012—by researchers at the Natural Resource Defense Council and the University of California, San Francisco (UCSF) estimated a total of 10 climate-sensitive events in the U.S. that ultimately cost $10 billion. 

That estimate stems from costs associated with 917 deaths, 20,568 hospitalizations and 17,857 emergency room visits, researchers said in the study published in the journal GeoHealth.

Among the costs connected to “climate-sensitive events” in 2012, researchers pointed to:

  • $252 million in Wisconsin: A heatwave led to several record temperatures were broken over the span of a week in July 2012. Researchers analyzed costs from an estimated 27 deaths, 155 hospitalizations and 1,620 emergency room visits that summer.
  • $1.6 billion in Colorado and $2.3 billion in Washington: Longer fire seasons in the western U.S. have resulted from higher temperatures and changes in seasonal rainfall patterns. Researchers examined costs from direct wildfire deaths and impacts attributed to wildfire smoke in 2012. There were 174 deaths, 256 hospitalizations and 1,432 emergency room visits in Colorado and 245 deaths, 371 hospitalizations and 1,897 emergency room visits in Washington.
  • $3.1 billion in New Jersey and New York: Hurricane Sandy caused severe flooding and power outages for more than 20 million customers. Sea level rise is believed to have amplified the storm surge. Researchers estimate there were 273 hurricane-related deaths, 6,602 hospitalizations and 4,673 emergency room visits.

Researchers said mortality costs were estimated using a mortality risk valuation implemented by the U.S. Environmental Protection Agency in regulatory impact analyses, with each life lost valued at $9.1 million in 2018 dollars. They also factored direct morbidity costs for each event using hospital admissions and emergency department visits from the federal Healthcare Cost and Utilization Project data well as costs associated with outpatient visits, home health care costs and prescribed drugs from the federal Medical Expenditure Panel Survey.

They acknowledged several limitations of the study. For instance, they said, “despite record-setting weather conditions across the U.S. in 2012, our analysis was restricted to case studies for which there was adequate documentation of health impacts,” they said.

They only included mental health impacts from Hurricane Sandy despite evidence that other events like wildfires can also adversely impact mental health. They also said extreme heat and Lyme disease are routinely underreported health effects that could result in conservative estimates.

“As such, the $10 billion total we calculated is likely a conservative estimate of health-related costs for these studies,” researchers said in this study.

Still, these costs are not just theoretical, but tangible costs that should be factored into the policy conversation, said Wendy Max, co-director of the Institute for Health & Aging at UCSF.

“We wanted to look at who bears this cost and we found two-thirds of the cost are borne by the Medicaid and Medicare programs,” Max said. “In an era of concern about healthcare costs, this is an important message: Climate change is adding to the public healthcare cost burden. That’s a message we’re hoping will resonate with policymakers.”