Supreme Court Will Hear First Major Abortion Case Since Two Trump Appointees Joined

https://www.wsj.com/articles/supreme-court-will-hear-first-major-abortion-case-since-two-trump-appointees-joined-11583192925?mod=hp_lista_pos2

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Case will test new conservative makeup’s approach to precedent.

The Supreme Court hears its first major abortion case Wednesday since two Trump nominees joined the bench, potentially signalling whether—and how much——reproductive rights may change under a bolstered conservative majority.

“There’s a lot on the line in this case, and more than most people realize,” said Mary Ziegler, a law professor at Florida State University and author of the forthcoming book “Abortion and the Law in America.”

Most prominently, the case involves the Supreme Court’s approach to precedent, since it largely is a replay of an issue the court decided in 2016, when by a 5-3 vote it struck down a Texas law requiring that abortion providers obtain admitting privileges at a nearby hospital.

The case also tests the strategy for antiabortion forces, who have been divided over the best way to roll back court precedents recognizing women’s constitutional right to end pregnancy. While some advocates seek to reverse outright Roe v. Wade, the 1973 decision recognizing abortion rights, others believe a more prudent approach is to carve away at the precedent through increasingly restrictive regulations that would spare the Supreme Court the controversy of directly overruling a landmark case.

The law in question, known as the Louisiana Unsafe Abortion Protection Act, isn’t based on a state policy to protect potential life, an interest that the Supreme Court has recognized as valid justification for some abortion restrictions.

Instead, it is based on the argument that abortion itself can be harmful to women, and that restricting access to the procedure therefore is beneficial to women. For that reason, the state’s brief contends that abortion providers shouldn’t be permitted to challenge the law on behalf of their patients, arguing that “a serious conflict of interest” exists between them and Louisiana’s women.

In striking down the Texas law in 2016, the court found the admitting-privilege requirement provided no health benefits to women while forcing many of the state’s abortion clinics to close.

The opinion, by Justice Stephen Breyer, cited evidence that admitting privileges do little to ensure continuity of care, as the state maintained, because when abortion has complications, they generally arise not at the clinic but days after the procedure, when the patient would visit her regular physician or local hospital. The court also observed that hospital admitting privileges aren’t a general credential but are granted for other purposes, such a doctor’s ability to bring in patients for treatment.

Statistically, however, only a tiny number of women require hospitalization after abortion, the court said. “In a word, doctors would be unable to maintain admitting privileges or obtain those privileges for the future, because the fact that abortions are so safe meant that providers were unlikely to have any patients to admit,” Justice Breyer wrote.

But that decision, Whole Woman’s Health v. Hellerstedt, hinged on since-retired Justice Anthony Kennedy, a maverick conservative who joined more liberal justices in the majority. With the late Justice Antonin Scalia’s seat vacant, three conservatives dissented, contending that the majority skirted procedural rules to throw out the Texas law.

President Trump, who appointed Justice Brett Kavanaugh to the vacancy, had as a candidate predicted his Supreme Court picks would vote to overrule Roe v. Wade.

In September 2018, three months after Justice Kennedy’s retirement, the Fifth U.S. Circuit Court of Appeals, in New Orleans, upheld a Louisiana admitting-privileges law that critics argue is identical to the Texas measure struck down two years earlier. The appellate court found the Louisiana Unsafe Abortion Protection Act wouldn’t burden abortion rights in Louisiana to the degree the Texas law did in its state.

An abortion clinic in Shreveport, La., June Medical Services LLC, and three doctors who perform the procedure appealed to the Supreme Court.

That puts the spotlight particularly on Justice Kavanaugh, whose remarks and writings, which have praised the dissent in Roe and supported a Trump administration policy to prevent an underage illegal immigrant from obtaining an abortion, have given hope to abortion opponents.

However, the focus may equally fall on Chief Justice John Roberts, who typically has voted against abortion-rights positions in Supreme Court cases—but he also has stressed an institutional interest in distinguishing the courts from political bodies, where outcomes on legislation can swing wildly based on the latest election results. For that reason, he may be hesitant to overrule even a decision he opposed simply because Justice Kennedy’s retirement presents an opportunity.

In February 2019, he joined the court’s liberal wing to block implementation of the Louisiana law while the appeal proceeded; four other conservatives dissented, although Justice Kavanaugh appended a statement suggesting he was taking a middle ground. He said he wasn’t persuaded that the Louisiana doctors had fully explored opportunities to obtain hospital-admitting privileges.

Should a frontal assault on recent precedent alienate the chief justice or another conservative justice, it probably would end prospects for similar admitting-privilege laws.

But the door could remain open for other abortion restrictions that aren’t covered by existing precedent, particularly if the court signals a readiness to pare back the ability of abortion providers to challenge regulations, or suggests it is more inclined to defer to legislative judgments regarding the safety of abortions rather than evidence, such as scientific research or the views of the medical profession, presented at trial court.

 

Majority of hospitals not meeting minimum volumes for high-risk surgeries, Leapfrog says

https://www.fiercehealthcare.com/hospitals-health-systems/leapfrog-surgical-study?mkt_tok=eyJpIjoiWm1Rd1kyVTNaVFl6WWpoayIsInQiOiJcL0ZDakZBUCtJWXhjNXBxUzVPRytqNUZBOU04ODlOU1I2ZFZyQ3ROcUo4eWoxckNMS2JsMVFBV1F6MEtHVkJZSVhZdWJQV2hoMVVTalwveTFnNUJYeFR6N3ZxaVZTUTNWVzI1UkMyQzh5MUxISUJaYm9KSEdYNlgyZVYyd0Q4Q0lvIn0%3D&mrkid=959610

medical surgery

The majority of hospitals are electively performing high-risk surgical procedures without sufficient ongoing experience to safely do so, according to a new report.

The report from The Leapfrog Group, an independent hospital safety watchdog group, looked specifically at surgical volumes. The report, which relied on final hospital data from the 2019 Leapfrog Hospital Survey that had responses from more than 2,100 hospitals, also looked at the minimum standards those hospitals require surgeons to meet in order to gain privileges.

They were looking specifically at the safety of eight high-risk procedures identified by an expert panel as having a “strong volume-outcome relationship.” The report also looks at whether hospitals are working to make sure every surgery is necessary. 

According to the report, an increasing number of hospitals are meeting minimum volume standards if they perform high-risk hospitals. The majority of rural hospitals opt out of performing the high-risk surgeries because they can’t meet the volume standards. Further, more hospitals are implementing protocols to monitor for appropriateness of surgeries.

“The good news is we are seeing progress on surgical safety. The bad news is the vast majority of hospitals performing these high-risk procedures are not meeting clear volume standards for safety,” said Leah Binder, president and CEO of The Leapfrog Group, in a statement. “This is very disturbing, as a mountain of studies show us that patient risk of complications or death is dramatically higher in low-volume operating rooms.”

For instance, the report suggested hospitals should be performing a minimum of 20 esophageal resections for cancer and a minimum of 20 pancreatic resections for cancer to improve the odds of a safer surgery for their patients. Surgeons should perform at least seven and 10 of those procedures a year, respectively, to gain privileges.

But for those two procedures, only 3% and 8% of hospitals met the volume standards for patient safety, the report found.

Hospitals were most likely to meet the safety standard of a minimum of 50 procedures a year for the hospital and 20 procedures a year for bariatric surgery for weight loss. More than 48% reported meeting that standard in 2019, up from 38% in 2018.

The survey found more than 70% of reporting hospitals have protocols to ensure appropriateness for cancer procedures.

But for other high-risk procedures evaluated such as open-heart surgeries or mitral valve repair and replacement, hospital compliance with ensuring appropriateness dropped to a range of 32% to 60%, depending on the procedure.

 

 

 

Kaufman Hall: Hospital revenue, margins improved in 2019, but warning signs ahead

https://www.healthcaredive.com/news/kaufman-hall-hospital-revenue-margins-improved-in-2019-but-warning-signs/573192/

Dive Brief:

  • U.S. hospital finances experienced a comparatively strong 2019, according to Kaufman Hall’s 2019 Year In Review Flash Hospital Report, which labeled the performance as “cautiously optimistic.”
  • While revenue and margins increased for the hospitals surveyed, inpatient volumes were weaker and more uneven.
  • The report from the management consultancy and data provider did unearth some potential warning signs for 2020, including a trend in rising expenses. The report also warned of a slowing economy and the potential economic impact from the coronavirus.

Dive Insight:

Hospitals are complex, high-volume and low-margin enterprises that often experience operational volatility. The latest report by Kaufman Hall confirmed the uneasy environment in which they operate.

Operating earnings were up 2% in 2019 compared to the prior year, and overall operating margin was up 7.4%. That was driven primarily by small bumps in revenue and patient volume. Net patient revenue per adjusted discharge rose 3.7%, and was up 1.5% per adjusted patient day.

Yet both pre-tax and overall operating margin were down 1.7% and 0.3%, respectively, when hospital budget forecasts were factored in. However, that drop was all attributable to hospitals in the Northeastern U.S.

Nevertheless, overall margins fell into the red in August and November, although they rebounded strongly in December, up 20% in that month compared to December 2018.

However, cost pressures were significant. Total expenses per adjusted discharge were up 3.4%, while labor expenses rose 2.6%. Non-labor expenses per adjusted discharge was up 4%. Adjusted discharges themselves were up only 0.7%, and showed year-over-year declines not only for the first quarter of 2019 but in June, August and November. And overall discharges declined among hospitals compared to budget forecasts in the Midwest and Northeast, down nearly 6% and 4%, respectively. Adjusted patient days were up 2.5%, although the average length of stay rose 1.9%.

While operating room minutes were up 2.2%, they were 0.3% below budget forecasts. Emergency department visits were down 0.4% compared to 2018, and were a full percentage point below forecasts.

“While it was good to see improvements in many financial areas, the long-term trendlines indicate that this is not a time for the C-suite to relax,” said Kaufman Hall Managing Director Jim Blake.

“These modest gains were made during a time when the economy was strong, unemployment was historically low, and government regulations favored business. There also were no existential health threats, such as the COVID-19 coronavirus outbreak nor the risks that come any time there is a national election,” Blake continued.

 

 

 

FTC to block Philadelphia area health system merger in 1st big hospital challenge in 3 years

https://www.healthcaredive.com/news/ftc-to-block-philadelphia-area-health-system-merger-in-1st-big-hospital-cha/573165/

Dive Brief:

  • The Federal Trade Commission has moved to block the proposed merger between two nonprofit Pennsylvania health systems over anticompetitive concerns in its first challenge to hospital M&A in more than three years.
  • Jefferson Health and Albert Einstein Healthcare Network both provide inpatient general acute care and inpatient acute rehabilitation services in Philadelphia County and Montgomery County. A marriage between the two systems, which agreed to definitively merge in September 2018, would harm patients because the two systems would no longer compete for patients and for inclusion in payer networks, the FTC says.
  • Jefferson and Einstein defended the deal Thursday in a joint statement provided to Healthcare Dive, saying they remain “confident our merger will result in continued high-quality care for our consumers.”

Dive Insight:

FTC Commissioner Christine Wilson has pledged to be tougher on hospital deals in 2020, including reviewing previously closed deals to see if they’ve delivered on promised cost and quality metrics. The last time the FTC questioned a major hospital merger was in 2016, when it urged Virginia and Tennessee not to approve the union of large operators Mountain States Health Alliance and Wellmont. The push was unsuccessful, and the two coalesced into rural system Ballad Health.

The deal, first announced in March 2018, has stagnated over the past two years as it was scrutinized by regulators at the FTC and Pennsylvania Attorney General Josh Shapiro.

“This merger would eliminate the competitive pressure that has driven quality improvements and lowered rates,” Ian Conner, Director of the FTC’s Bureau of Competition, said in a statement. The rivalry between the two nonprofit players for market dominance has resulted in upgraded medical facilities and technological investments, but that progress could stall if Jefferson and Albert Einstein combined, FTC said.

Jefferson and Einstein boast a combined roughly $5.9 billion in annual revenue, along with 18 hospitals, more than 50 outpatient and urgent care centers and a handful of rehab and post-acute facilities. Jefferson, the bigger player, has 14 hospitals across South Jersey and Philadelphia, Montgomery and Bucks counties.

The regulators said they will soon file a formal complaint in the U.S. District Court for the Eastern District of Pennsylvania.

The complaint alleges that as a result of the merger, Jefferson and Einstein would control at least 60% of the inpatient general acute care services market in North Philadelphia, and 45% in Montgomery. That includes services like medical or surgical diagnostics and treatments requiring an overnight stay.

Jefferson and Einstein manage six of the eight inpatient rehab facilities for recovering from serious, acute conditions in the Philadelphia region, and would control at least 70% of that market if combined.

The hospitals said their marriage represents a “creative effort” to increase access at a time when safety net hospitals are struggling.

“We believe we have presented a strong and comprehensive case as to how the merger would benefit the patients we serve and advance our academic mission without reducing competition for healthcare services,” the systems, which have had an academic partnership for more than two decades, said.

Several studies have debunked theories that bigger is better in terms of quality of care when it comes to health systems.

FTC plans to seek a temporary restraining order and preliminary injunction to prevent Jefferson and Albert Einstein from consummating the merger pending an administrative trial scheduled to being in September this year.  

 

 

Why Are Nonprofit Hospitals So Highly Profitable?

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These institutions receive tax exemptions for community benefits that often don’t really exist.

“So, how much money do you guys make if I do that test you’re ordering for me?” This is a question I hear frequently from my patients, and it’s often followed by some variant of, “I thought hospitals were supposed to be nonprofit.”

Patients are understandably confused. They see hospitals consolidating and creating vast medical empires with sophisticated marketing campaigns and sleek digs that resemble luxury hotels. And then there was the headline-grabbing nugget from a Health Affairs study that seven of the 10 most profitable hospitals in America are nonprofit hospitals.

Hospitals fall into three financial categories. Two are easy to understand: There are fully private hospitals that mostly function like any other business, responsible to shareholders and investors. And there are public hospitals, which are owned by state or local governments and have obligations to care for underserved populations. And then there are “private nonprofit” hospitals, which include more than half of our hospitals.

Nearly all of the nation’s most prestigious hospitals are nonprofits. These are the medical meccas that come to mind when we think of the best of American medicine — Mayo Clinic, Cleveland Clinic, Johns Hopkins, Mass General.

The nonprofit label comes from the fact that they are exempt from federal and local taxes in exchange for providing a certain amount of “community benefit.”

Nonprofit hospitals have their origins in the charity hospitals of the early 1900s, but over the last century they’ve gradually shifted from that model. Now their explosive growth has many questioning how we define “nonprofit” and what sort of responsibility these hospitals have to the communities that provide this financial dispensation.

It’s time to rethink the concept of nonprofit hospitals. Tax exemption is a gift provided by the community and should be treated as such. Hospitals’ community benefit should be defined more explicitly in terms of tangible medical benefits for local residents.

It actually isn’t much of a surprise that nonprofit hospitals are often more profitable than for-profit hospitals. If a private business doesn’t have to pay taxes, its expenses will be lower. Additionally, because nonprofit hospitals are defined as charitable institutions, they can benefit from tax-free contributions from donors and tax-free bonds for capital projects, things that for-profit hospitals cannot take advantage of.

The real question surrounding nonprofit hospitals is whether the benefits to the community equal what taxpayers donate to these hospitals in the form of tax-exempt status.

On paper, the average value of community benefits for all nonprofits about equals the value of the tax exemption, but there is tremendous variation among individual hospitals, with many falling short. There is also intense disagreement about how those community benefits are calculated and whether they actually serve the community in question.

Charity medical care is what most people think of when it comes to a community benefit, and before 1969 that was the legal requirement for hospitals to qualify for tax-exempt status. In that year, the tax code was changed to allow for a wide range of expenses to qualify as community benefits. Charitable care became optional and it was left up to the hospitals to decide how to pay back that debt. Hospitals could even declare that accepting Medicaid insurance was a community benefit and write off the difference between the Medicaid payment and their own calculations of cost.

An analysis by Politico found that since the full Affordable Care Act coverage expansion, which brought millions more paying customers into the field, revenue in the top seven nonprofit hospitals (as ranked by U.S. News & World Report) increased by 15 percent, while charity care — the most tangible aspect of community benefit — decreased by 35 percent.

Communities are often conflicted about the nonprofit hospitals in their midst. Many of these institutions are enormous employers — sometimes the largest employer in town — but the economic benefits do not always trickle down to the immediate neighborhoods. It is not unusual to see a stark contrast between these gleaming campuses and the disadvantaged neighborhoods that surround them.

In some communities, nonprofit hospitals are beloved institutions with a history of caring for generations of families. In other communities, the sums of money devoted to lavish expansions, aggressive advertising and eye-popping executive compensation are a source of irritation.

The average chief executive’s package at nonprofit hospitals is worth $3.5 million annually. (According to I.R.S. regulations, “No part of their net earnings is allowed to inure to the benefit of any private shareholder or individual.”) From 2005 to 2015, average chief executive compensation in nonprofit hospitals increased by 93 percent. Over that same period, pediatricians saw a 15 percent salary increase. Nurses got 3 percent.

A number of communities that think nonprofit hospitals take more than they give back have started to sue. The University of Pittsburgh Medical Center fought off one lawsuit from the city’s mayor to revoke its tax-exempt status. Last year it faced another from the Pennsylvania attorney general, alleging that the medical center, valued at $20 billion, did not fulfill “its obligation as a public charity” (the lawsuit was dismissed).

Morristown Hospital in New Jersey lost most of its property-tax exemption because it was found to be behaving as a for-profit institution. The judge in the case wrote that if all nonprofit hospitals operated like this, then “modern nonprofit hospitals are essentially legal fictions.”

It’s important to recognize the extreme variance in hospitals’ financial status. Many nonprofit hospitals, especially in rural areas, struggle mightily; scores of rural hospitals have closed — and hundreds more are teetering — leading to spikes in local death rates. At the other end are hospitals that earn several thousand dollars in profit per patient.

The most profitable nonprofit hospitals tend to be part of huge health care systems. Consolidations are one of the driving forces behind the towering profits, because monopoly hospitals are known to charge more than nonmonopoly hospitals.

Should these highly profitable institutions be exempt from the taxes that pay for local roads, police services, fire protection and 911 services? Should local residents have to pay for the garbage collection for institutions that can afford multimillion-dollar salaries for top executives?

Tax exemption needs to be redefined. Low-impact projects such as community health fairs that function more like marketing shouldn’t be allowed as part of the calculation. Nor should things that primarily benefit the institution, like staff training.

Additionally, hospitals should not be allowed to declare Medicaid “losses” as a community benefit. While it’s true that Medicaid typically pays less than private insurance companies, Medicaid plays a crucial role for private insurance markets by acting as a high-risk pool for patients with severe illness and disability. Hospitals benefit mightily from this taxpayer-funded arrangement. These large medical centers also enthusiastically accept taxpayer money for research, something that burnishes their image and bolsters their rankings. That enthusiasm needs to be mandated to extend toward Medicaid patients and the face value of their insurance.

The I.R.S. states that charitable hospitals “must be organized and operated exclusively for specific tax-exempt purposes.” Thus charitable care should be front and center. Spending on social determinants of health can also be a legitimate community benefit, but the community that is footing the tax break needs to have a forceful say in how this money is spent, rather than leave it solely up to the hospital.

As many policy scholars have noted, tax exemption is a blunt instrument. For struggling hospitals, particularly in communities with a shortage of health care resources, tax exemption can make sense. In medically saturated areas, where profits and executive compensation approach Wall Street levels, tax exemption should raise eyebrows.

If society decides that tax exemption is a worthwhile means to improve health — and it certainly can be — then our regulations need to be far stricter and more explicitly tied to community health. As the United States continues to fall behind its international peers in terms of health outcomes in local communities, there is certainly no lack of opportunity.

 

 

 

Five Healthcare Industry Changes to Watch in 2020

https://www.managedhealthcareexecutive.com/news/five-healthcare-industry-changes-watch-2020

Innovation

Industry experts expect significant changes to shake up the healthcare landscape in the next few years, which will affect both health insurers and providers. Many are the result of a shift toward value-based care, a move toward decreased care in hospital settings, technological advances, and other forces.

Here’s a look at what can payers and providers can expect to occur, why each change is occurring, and how payers and providers can prepare for each change:

1. A shift in healthcare delivery from hospital to ambulatory settings

Healthcare delivery will continue to move from inpatient to outpatient facilities. “More surgeries and diagnostic procedures that historically have required an inpatient hospital stay can now be performed more safely and efficiently in an outpatient setting,” says Stephen A. Timoni, JD, an attorney and partner at the law firm Lindabury, McCormick, Estabrook & Cooper, in Westfield, New Jersey, who represents healthcare providers in areas of reimbursement and managed care contracting. A growing volume of outpatient care will be provided in ambulatory surgery centers, primary care clinics, retail clinics, urgent care centers, nurse managed health centers, imaging facilities, emergency departments, retail clinics, and patients’ homes.

This change is occurring as the result of clinical innovations, patient preferences, financial incentives, electronic health records, telemedicine, and an increased focus on improving quality of care and clinical outcomes. “The upward trend in value-based payment models is also influencing this shift, with the goal of reducing the cost of care and improving the overall patient experience,” Timoni says.

Payers and providers can prepare for this shift by analyzing and forecasting the cost and reimbursement implications of providing care in outpatient settings compared to inpatient settings. They should continue to analyze changing patient demographics, consumer preferences, and satisfaction trends, Timoni says. Collecting and analyzing data regarding quality and clinical outcomes as the result of changes in delivery of care from inpatient to outpatient is also key. Healthcare providers should develop effective strategies to grow capacity and infrastructure for outpatient services and invest in innovative mobile technologies, diagnostic tools, and telemedicine systems.

2. Consolidation will continue industry wide

More healthcare entities will continue to merge together. “Even though the number of available partners for transactions is shrinking, new deals pop up all the time because smaller entities are being targeted or entities that had been holding out are now changing their position,” says Matthew Fisher, JD, partner and chair of the Health Law Group at Mirick O’Connell, a law firm in Westborough, Massachusetts. Increased consolidation will result in higher healthcare prices as larger sized institutions use their size to their advantage. Another impact will be narrowing the field of contracting options, which will result in greater dominance by fewer entities in a market.

This change is occurring because industry stakeholder believes that consolidation is the way to survive in a healthcare landscape still being shaped by the ACA. “The belief is that value-based care models require single unified entities as opposed to more contractual-based ventures to succeed,” Fisher says. Another factor is that momentum for consolidations across the industry has continued to build and no player wants to be left behind.

Along these lines, Timoni says that consolidation has been motivated by the evolving and challenging commercial and government reimbursement models which include lower fee-for-service payment rates, value-based payment components, and incentives to move care from inpatient to outpatient settings. “Basic economic theory suggests that consolidation of hospitals and physicians enables these combined providers to charge higher prices to private payers as the result of a lack of competition,” Timoni says. “Likewise, combined insurers are able to charge higher premiums to their subscribers.”

Payers and providers can prepare for this change by evaluating their operations and determining whether consolidation with another entity is advantageous. “This requires assessing an entity’s operations and the risks of consolidation,” Fisher says.

Timoni advises payers and providers to monitor the consolidation landscape and develop effective merger and acquisition strategies. These strategies should focus on optimizing economies of scale to reduce costs and finding the best partners to achieve improved quality of care and effectively manage population health.

3. Protecting data privacy

Ongoing attention will be given to protecting the privacy of healthcare data. New laws, at both the federal and state levels, will be considered that could introduce new regulatory requirements, Fisher says.

While a federal law in an election year may be doubtful, individual states are proceeding. The California Consumer Protection Act (CCPA), intended to enhance privacy rights and consumer protection, will become effective in 2020, for example. Even though the CCPA doesn’t cover all healthcare data, healthcare organizations will still collect additional information that could be subject to CCPA, which means more compliance obligations, Fisher says. Other states are considering how to jump on the privacy legislation bandwagon, which means that regulatory requirements will increase. “Even in the absence of legislation, payers and providers can expect individuals to assert concerns and use public pressure to drive increased attention to privacy issues,” Fisher says.

Meanwhile, debates around what is meant by privacy continue to evolve, Fisher continues. A backlash against the non-transparent sharing of healthcare data and arguable profiteering is creating anger among patients and other groups. Simultaneously, data breaches continue to be reported on a daily basis. Add in that healthcare is a prime target, and all of the factors point to healthcare needing to do more to protect data.

Payers and providers can embrace increased data privacy by focusing on existing compliance efforts, which will require taking time to better understanding HIPAA. “Ignoring or only making superficial efforts to respect data privacy is insufficient,” Fisher says. “Merely doing what is legally permissible may not be good enough.”

4. Consumerization of healthcare

As patients assume more financial responsibility for their healthcare costs due to higher premiums, co-pays, co-insurance, and deductibles, they have become more concerned with the value of the care they receive as well as cost. Patients will likely demand improved access to clearer benefits, billing, and network information to improve transparency, says Brooks Dexter, MBA, Los Angeles-based managing director and head of the healthcare M&A advisory practice at Duff & Phelps, a global consultancy firm.

“Healthcare providers must follow suit to meet value expectations and deliver more consumer-friendly services or may risk losing market share to innovative new healthcare arrangements, such as direct primary care, which offer convenient and quality care with simplified medical billing,” Dexter says. Some ways to do this are to offer better patient portals, expanded hours, improved access, and clear procedure pricing. Despite the trend, payers and providers will most likely continue to resist CMS’ efforts to force greater cost transparency by requiring hospitals to post payer-specific negotiated charges for common services that can be shopped.

Furthermore, Peter Manoogian, principal at ZS, a consulting firm focused on healthcare in Boston, says that the voices of older adults will become comparatively louder as this rapidly growing segment becomes more tech-savvy. The Trump Administration supports increased use of Medicare Advantage and expanding consumer choices. Plan options will reach a record high this year and create an unprecedented amount of choices for this population. The average number of plans a beneficiary has access to this year will be 28, up by a whopping 50% from 2017. What’s more, new entrants that boast a customer-driven approach such as Oscar Health are entering the fray in major markets such as New York and Houston.

Health plans need to be laser focused on improving their understanding and engagement of their customers—who are evolving themselves. “To stay ahead of the change, health plans need access to the right data coupled with leading-edge analytics and technology to continuously mine insights on what members are seeking in their healthcare experience, how patients and providers interact throughout their healthcare journey, and how to meet the needs of future healthcare customers,” Manoogian says.

Health plans will need to take more of a retail focus than what they’re accustomed to, Manoogian says. The bar for providing a great experience and retaining members will also increase.

5. More technological innovations will emerge

Technological innovation will continue to dramatically and rapidly change the manner in which healthcare is delivered, resulting in more personalized care, improved clinical outcomes and patient experience, and overall quality of life. “Information systems, mobile technology, high-tech digital devices, and electronic medical records will allow payers and providers to accurately measure clinical outcomes and effectively manage the continuum of medical care and their population’s overall health,” Timoni says.

One specific way that care will change is that providers will start seeing telehealth play a more critical role in care delivery as the brick-and-mortar, in-person care model becomes less common. “Telehealth will grow past a nice-to-have tool into a standard of care, particularly for low-risk and predictable appointments,” says Cindy Gaines, MSN, RN, clinical leader, Population Health Management, Philips, a company focused on transforming care through collaborative health management in Alpharetta, Georgia. This transformation will enable providers to better tailor their care to patients’ unique needs, while increasing patient autonomy and engagement.

Technological innovations are occurring due to booming private sector interest and investment in medical technology innovation. “Patients are demanding real-time health information, personalized medicine, higher quality of care, and convenient treatment options,” Timoni says. “Payers are demanding more detailed and expansive outcomes data to scientifically manage the reimbursement system to lower costs and improve their subscribers’ health. The medical and information technology fields are attracting more high-skilled workers, who will continue to drive innovation to new levels as long as investor interest is sustained.”

Regarding the increased use of telehealth, Gaines says that many appointments that occur in a hospital today can take place outside of the hospital. And, as the healthcare industry increasingly moves toward value-based care, providers need to extend their line-of-sight outside of a hospital’s four walls. For example, a low-risk follow-up appointment after an operation is usually mostly dialogue and has a predictable outcome—it could be conducted electronically. “By filling up hospitals with visits that could occur virtually, it makes it harder for patients who need face-to-face healthcare access to get it,” she says.

A lack of insurance coverage is a major impediment to telehealth adoption for most health systems. Therefore, providers should pair guaranteed reimbursement opportunities with change management workflows to advance these efforts, Gaines says. They would also be smart to leverage their patients’ everyday devices to manage their care, whether it’s on their smart phone, a fitness watch, or voice assistant.

To embrace technological innovation, payers and providers must continue to be educated and aware of the expanding medical technology landscape and develop technology investment and deployment strategies. “Consider investing and participating in technology venture capital funds and partnering with private sector technology manufacturers and research institutions,” Timoni says.

 

 

 

Aetna draws criticism for automatic down-codes for office visits

https://www.beckershospitalreview.com/finance/aetna-draws-criticism-for-automatic-down-codes-for-office-visits.html?utm_medium=email

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Providers are concerned a new national policy from Aetna involving evaluation and management services will result in inappropriate down-codes.

Under the policy, Aetna will automatically down-code claims submitted for office visits or certain modifiers when the the insurer finds an “apparent overcode rate of 50 percent or higher.” The policy concerns office visits with the 99000 series of evaluation and management codes and the 92000 series of ophthalmologic examination codes, as well as modifiers 25 and 59, the American Optometric Association said in an advocacy post.

AOA said Aetna didn’t explain how an overcoding determination is made under the insurer’s algorithm, whether with or without medical record reviews.

“The AOA believes it is inappropriate to downcode such claims without first reviewing actual medical records and questions whether it complies with HIPAA; a variety of state laws related to fair, accurate and timely processing of claims; and Aetna’s contracts with patients and physicians alike,” the association said on its advocacy page.

Physicians can appeal down-coded claims through Aetna’s internal process.

In a statement to Becker’s Hospital Review, Aetna explained why it implemented the policy:

“We periodically review our claims data for correct coding and to implement programs that support nationally recognized and accepted coding policies and practices. Through a recent review, we identified healthcare providers across several specialties who are significant outliers with respect to coding practices. While we recognize that healthcare providers undoubtedly may have complex medical cases that are unique to their practice, this result is much higher than the average for physicians across most specialties.

“For this small, targeted group of healthcare providers, we will review their claims against [American Medical Association] and CMS coding guidelines. Based on that review, we may potentially adjust their payments if the information on the claim is not supported by the level of service documented in the medical record.”

 

Miami man with ‘junk plan’ owes thousands after hospital visit for coronavirus symptoms

https://www.beckershospitalreview.com/finance/miami-man-with-junk-plan-owes-thousands-after-hospital-visit-for-coronavirus-symptoms.html?utm_medium=email

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A man in Miami went to Jackson Memorial Hospital last month to receive a test for coronavirus after developing flu-like symptoms. He didn’t have the virus, but he was hit with a $3,270 medical bill, according to the Miami Herald.   

Osmel Martinez Azcue said he normally would have used over-the-counter medicine to fight his flu-like symptoms. However, since he had recently visited China, he followed the advice of public health experts and went to the hospital to get tested for coronavirus, known as COVID-19. 

Mr. Azcue said hospital staff told him a CT scan would be necessary to screen for coronavirus. He asked to receive a flu test first. The flu test came back positive.

A few weeks after leaving Jackson Memorial Hospital, Mr. Azcue received a $3,270 medical bill. Though he was insured, Mr. Azcue had a so-called “junk plan,” which offered limited benefits and didn’t cover pre-existing conditions.

Based on his insurance plan, Mr. Azcue is responsible for $1,400 of the bill, hospital officials told the Miami Herald. However, to get the claim covered, Mr. Azcue said his insurance company requested three years of medical records to show that his flu didn’t relate to pre-existing conditions.

The sale of “junk plans,” like the one Mr. Azcue pays $180 per month for, expanded after President Donald Trump’s administration rolled back ACA regulations in 2018.

Access the full Miami Herald article here.

 

110 hospital benchmarks | 2020

https://www.beckershospitalreview.com/lists/110-hospital-benchmarks-2020.html?utm_medium=email

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Hospitals across the nation compete in a number of ways, including on quality of care and price, and many use benchmarking to determine the top priorities for improvement. The continuous benchmarking process allows hospital executives to see how their organizations stack up against regional competitors as well as national leaders.

Becker’s Hospital Review has collected benchmarks related to some of the most important day-to-day areas hospital executives oversee: quality, finance, staffing and utilization.

Finance

Key ratios

Source: Moody’s Investors Service, “Not-for-profit and public healthcare – US: Medians” report, September 2019. 

The medians are based on an analysis of audited fiscal 2018 financial statements for 284 freestanding hospitals, single-state health systems and multistate health systems, representing 79 percent of all Moody’s-rated healthcare entities. Children’s hospitals, hospitals for which five years of data are not available and certain specialty hospitals were not eligible for inclusion in the medians.

1. Maintained bed occupancy: 66.6 percent

2. Operating margin: 1.8 percent

3. Excess margin: 4.3 percent

4. Operating cash flow margin: 7.9 percent

5. Return on assets: 3.6 percent

6. Three-year operating revenue CAGR: 5.6 percent

7. Three-year operating expense CAGR: 6.4 percent

8. Cash on hand: 200.9 days

9. Annual operating revenue growth rate: 5.5 percent

10. Annual operating expense growth rate: 5.4 percent

11. Total debt-to-capitalization: 33.7 percent

12. Total debt-to-operating revenue: 33.3 percent

13. Current ratio: 1.9x

14. Cushion ratio: 21.6x

15. Annual debt service coverage: 4.7x

16. Maximum annual debt service coverage: 4.4x

17. Debt-to-cash flow: 3.1x

18. Capital spending ratio: 1.2x

19. Accounts receivable: 45.9 days

20. Average payment period: 61.4 days

21. Average age of plant: 11.7 years

Hospital margins by credit rating group

Source: S&P Global Ratings “U.S. Not-For-Profit Health Care System Median Financial Ratios — 2018 vs. 2017” report, September 2019.

AA+ rating

22. Operating margin: 5.5 percent

23. Operating EBIDA margin: 12 percent

24. Excess margin: 9.2 percent

25. EBIDA margin: 14.8 percent

AA rating

26. Operating margin: 4.4 percent

27. Operating EBIDA margin: 10.1 percent

28. Excess margin: 6.7 percent

29. EBIDA margin: 12.4 percent

AA- rating

30. Operating margin: 3.4 percent

31. Operating EBIDA margin: 9.5 percent

32. Excess margin: 4.0 percent

33. EBIDA margin: 10.4 percent 

A+ rating

34. Operating margin: 1.6 percent

35. Operating EBIDA margin: 7.4 percent

36. Excess margin: 3.3 percent

37. EBIDA margin: 10.1 percent 

A rating

38. Operating margin: 2.1 percent

39. Operating EBIDA margin: 7.6 percent

40. Excess margin: 3.3 percent

41. EBIDA margin: 8.6 percent

 A- rating

42. Operating margin: 1 percent

43. Operating EBIDA margin: 7.8 percent

44. Excess margin: 2.5 percent

45. EBIDA margin: 8.3 percent

Average adjusted expenses per inpatient day

Source: Kaiser State Health Facts, accessed in 2020 and based on 2018 data. 

Adjusted expenses per inpatient day include all operating and nonoperating expenses for registered U.S. community hospitals, defined as public, nonfederal, short-term general and other hospitals. The figures are an estimate of the expenses incurred in a day of inpatient care and have been adjusted higher to reflect an estimate of the volume of outpatient services.

46. Nonprofit hospitals: $2,653

47. For-profit hospitals: $2,093

48. State/local government hospitals: $2,260

Prescription drug spending

Source: NORC at the University of Chicago’s “Recent Trends in Hospital Drug Spending and Manufacturer Shortages” report, January 2019. Figures below are based on 2017 data.

49. Average prescription drug spending per adjusted admission at U.S. community hospitals: $555 

50. Average outpatient prescription drug spending per adjusted admission at U.S. community hospitals: $523

51. Average inpatient prescription drug spending per admission at U.S. community hospitals: $756

52. GPO hospital spending on Activase:  $210 million

53. GPO hospital spending on Remicade: $138 million

54. GPO hospital spending on Humira: $122 million

55. GPO hospital spending on Rituxan: $92 million

56. GPO hospital spending on Neulasta: $92 million

57. GPO hospital spending on Prolia: $85 million

58. GPO hospital spending on Harvoni: $83 million

59. GPO hospital spending on Procrit: $80 million

60: GPO hospital spending on Lexiscan: $64 million

61. GPO hospital spending on Enbrel: $60 million

Quality and process of care 

Source: Hospital Compare, HHS, Complications and Deaths-National Averages, May 2018, and Timely and Effective Care-National Averages, May 2018, the latest available data for these measures.

Hospital-acquired conditions

The following represent the average percentage of patients in the U.S. who experienced the conditions.

62. Collapsed lung due to medical treatment: 0.27 percent

63. A wound that splits open on the abdomen or pelvis after surgery: 0.95 percent

64. Accidental cuts and tears from medical treatment: 1.29 percent

65. Serious blood clots after surgery: 3.85 percent

66. Serious complications: 1 percent

67. Bloodstream infection after surgery: 5.09 percent

68. Postoperative respiratory failure rate: 7.35 percent

69. Pressure sores: 0.52 percent

70. Broken hip from a fall after surgery: 0.11 percent

71. Perioperative hemorrhage or hematoma rate: 2.53 percent

Death rates

72. Death rate for CABG surgery patients: 3.1 percent

73. Death rate for COPD patients: 8.5 percent

74. Death rate for pneumonia patients: 15.6 percent

75. Death rate for stroke patients: 13.8 percent

76. Death rate for heart attack patients: 12.9 percent

77. Death rate for heart failure patients: 11.5 percent

Outpatients with chest pain or possible heart attack

78. Median time to transfer to another facility for acute coronary intervention: 58 minutes

79. Median time before patient received an ECG: 7 minutes

Lower extremity joint replacement patients

80. Rate of complications for hip/knee replacement patients: 2.5 percent

Flu vaccination

81. Healthcare workers who received flu vaccination: 90 percent

Pregnancy and delivery care

82. Mothers whose deliveries were scheduled one to two weeks early when a scheduled delivery was not medically necessary: 2 percent

Emergency department care

83. Average time patient spent in ED after the physician decided to admit as an inpatient but before leaving the ED for the inpatient room: 103 minutes

84. Average time patient spent in the ED before being sent home: 141 minutes

85. Average time patient spent in the ED before being seen by a healthcare professional: 20 minutes

86. Percentage of patients who left the ED before being seen: 2 percent

Staffing

Source: American Hospital Association “Hospital Statistics” report, 2019 Edition.

Average full-time staff

87. Hospitals with six to 24 beds: 101

88. Hospitals with 25 to 49 beds: 176

89. Hospitals with 50 to 99 beds: 302

90. Hospitals with 100 to 199 beds: 683

91. Hospitals with 200 to 299 beds: 1,264

92. Hospitals with 300 to 399 beds: 1,789

93. Hospitals with 400 to 499 beds: 2,670

94. Hospitals with 500 or more beds: 5,341

Average part-time staff

95. Hospitals with six to 24 beds: 52

96. Hospitals with 25 to 49 beds: 84

97. Hospitals with 50 to 99 beds: 141

98. Hospitals with 100 to 199 beds: 286

99. Hospitals with 200 to 299 beds: 472

100. Hospitals with 300 to 399 beds: 604

101. Hospitals with 400 to 499 beds: 1,009

102. Hospitals with 500 or more beds: 1,468

Utilization 

Source: American Hospital Association “Hospital Statistics” report, 2019 Edition.

Average admissions per year

103. Hospitals with six to 24 beds: 408

104. Hospitals with 25 to 49 beds: 901

105. Hospitals with 50 to 99 beds: 2,097

106. Hospitals with 100 to 199 beds: 5,809

107. Hospitals with 200 to 299 beds: 11,241

108. Hospitals with 300 to 399 beds: 16,635

109. Hospitals with 400 to 499 beds: 20,801

110. Hospitals with 500 or more beds: 34,593

 

EVERY HOSPITAL BOARD NEEDS A CEO SUCCESSION PLAN. HALF ARE FAILING.

https://www.healthleadersmedia.com/strategy/every-hospital-board-needs-ceo-succession-plan-half-are-failing

The organization needs to have a strong sense for who will lead next. That’s ultimately the responsibility of the board, not the incumbent. This article appears in the July/August 2019 edition of HealthLeaders magazine.

The departure of a CEO can severely disrupt an organization’s progress, especially when the leader leaves suddenly without a clear successor. Despite the well-known need for succession planning, an alarming number of healthcare provider organizations are chugging along without a plan in place, just hoping that their top executives stick around for the foreseeable future.

Forty-nine percent of hospital and health system boards lack a formal CEO succession plan, according to the American Hospital Association Trustee Services 2019 national healthcare governance survey report. That leaves them vulnerable to the disruptive gusts of a CEO’s sudden departure, and it can inhibit their ability to pursue longer-term strategies by leaving them overly dependent on one leader’s vision.

The failure of these boards to formalize CEO succession plans is outrageous and unacceptable, says Jamie Orlikoff, president of the Chicago-based healthcare governance and leadership consulting firm Orlikoff & Associates Inc. and board member of St. Charles Health System in Bend, Oregon. “Whatever the reasons are, it’s just a fundamental and inexcusable abrogation of a basic governance responsibility, so I am nothing less than shocked that the figure is almost 50%,” Orlikoff says.

Why Plans Aren’t Made There are typically a few basic reasons why an organization may be slow to finalize a CEO succession plan. Perhaps the current CEO just doesn’t want to talk about it, Orlikoff says. Some executives are more comfortable talking to their families about their own life insurance plans than they are talking to the board about what to do in the event of their sudden departure, he says. Or perhaps it’s the board members who don’t want to talk about it. Orlikoff says at least four board chairpersons for various organizations have told him in the past seven years that they don’t want their current CEOs to leave and that they don’t want to think about succession planning because the recruitment process is too burdensome. Or there could be an unhealthy power dynamic between the CEO and the board, with the CEO asserting control over tasks that should be handled by the board members, Orlikoff says.

What makes the relationship between the CEO and the board so tricky is how it ties together two distinct relationships. On the one hand, the CEO and the board are strategic partners defining and executing a shared vision. On the other, they are an employee and an employer. “Those are two very, very different and very important functions,” Orlikoff says.

“Some boards have great difficulty envisioning the distinction between those two roles.” A board should lean on the CEO as a strategic partner because the CEO is likely to know more about the industry and more about the local market than the board members do, Orlikoff says. But when the board neglects to assert its proper place in the employer-employee relationship, the CEO may be given free rein over a broader scope of issues than is appropriate, and that can impede the CEO succession planning process, he adds.

In other words, while it’s perfectly appropriate for a CEO to groom a potential successor, the board should not defer to the CEO’s selection, and the CEO should not insist that the board do so. How to Fix This The existence or nonexistence of a formal CEO succession plan is often a symptom of whether the relationship between a CEO and the board is healthy, Orlikoff says.

Notably, the task of devising a succession plan is one exercise that can improve that relationship, he adds. While the detailed steps each organization should take will vary from one situation to another, there are two specific items that Orlikoff recommends: 1. Ask about the mundane threat of a bus.

Whether you’re a CEO or board member for an organization without a formal succession plan in place, there’s one straightforward question you can ask to kickstart productive dialogue on the topic: What do we do if our CEO gets hit by a bus tonight? The question is nonthreatening. It doesn’t signal a CEO’s possible intent to resign or retire. It doesn’t suggest the board members are thinking about giving him or her the boot.

It simply asks, as a matter of fact, how the organization will maintain continuity in the event of an unplanned CEO departure, just as parents would speak with their families about life insurance, Orlikoff says. The CEO should tell the board, without any other senior leaders present, whom the CEO would pick to step into the interim CEO role, Orlikoff says. That will inevitably prompt follow-up questions: Would the interim CEO be a good permanent replacement? Which of the requisite skills do they lack? How well do they align with our long-term needs and vision?

The conversations about an unplanned CEO departure will flow naturally into questions about a planned departure. Where are we in the current CEO’s contract cycle? When does the CEO want to retire? What skills and traits will our next CEO need to lead the organization into the future of healthcare?

Conversations about an unplanned departure should begin on the very first day of a new CEO’s contract, Orlikoff says. Conversations about a planned departure should begin at the end of the CEO’s first year, he says. For a CEO with a five-year contract, the board should start asking halfway through contract whether the CEO wishes to renew a contract or leave the organization, and the board should know three years into the five-year contract whether the CEO wants to stay, he says.

Hold executive sessions without the CEO present. An increasing number of hospital and health system boards are routinely listing executive sessions on their meeting agendas, and that’s a good thing, according to the AHA Trustee Services survey. A slight majority, 52%, of all respondents routinely included an executive session in the agenda of every board meeting, according to the survey report. But 26% of system boards, 59% of subsidiary boards, and 48% of freestanding boards still don’t.

Even if a board has an executive session, though, that doesn’t mean members are able to fully discuss the topics in their purview. The survey found that CEOs participate in the entire executive session for a majority, 54%, of all boards. That includes 41% of system boards and 57% for both subsidiary and freestanding boards. That deprives trustees of an opportunity to discuss the CEO in his or her absence and might impede the CEO succession planning process, Orlikoff says.

Related: 4 Steps for Planning CEO Succession Boards should think of their meetings in three stages, Orlikoff says. The first stage includes everyone in the room, including board members, the CEO, senior executives, and invited guests. The second stage is a modified executive session that includes the board members and CEO only, which is where the majority of the meeting should take place. The third stage should be an executive session with the board members only. “Confident, secure CEOs know that their boards need to go into executive session without them present occasionally in order to perform certain governance functions. They encourage it,” Orlikoff says. “Insecure CEOs or those who are attempting to control and manipulate the board are very uncomfortable with executive sessions and don’t want the board going into an executive session.”

It’s Mutually Beneficial While it may be difficult to prompt board members to think about a future under different leadership, CEOs who do so are not only investing in the organization’s long-term success but also signaling that they are the sort of leader willing to make investments in the organization’s long-term success. “When a CEO goes to the board and says, ‘You guys need to do this,’ … it demonstrates an incredibly high degree of confidence.

It also demonstrates an incredibly high degree of commitment to the organization,” Orlikoff says. “It shows that you’re thinking beyond yourself,” he adds. “You’re thinking about the best interests of the organization, that you’re willing to have difficult conversations for the good of the organization.”

“INSECURE CEOS OR THOSE WHO ARE ATTEMPTING TO CONTROL AND MANIPULATE THE BOARD ARE VERY UNCOMFORTABLE WITH EXECUTIVE SESSIONS AND DON’T WANT THE BOARD GOING INTO AN EXECUTIVE SESSION.”

KEY TAKEAWAYS

Not having a formal succession plan may be a symptom of an unhealthy relationship between the CEO and the board.

When CEOs prompt the board to think about who will lead next, it demonstrates self-confidence and commitment to the organization.