Category Archives: Health System

Medical costs projected to increase 6% by 2020, says PwC

Posted on by • Posted in Biosimilars, Chronic Diseases, Generic Drugs, Health Policy, Health System, High Prices, Hospital, Hospital Industry, Out of Pocket Expenses, Telemedicine, Value-Based Healthcare • Leave a comment

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Utilization is still being dampened by high deductibles and other cost sharing, but at the expense of employee satisfaction.

Medical costs are rising, and by this time next year costs will likely show a modest increase of about 6% over the past two years, according to a new report from PwC, PricewaterhouseCoopers.

After figuring in health plan changes such as increased employee cost sharing and network and benefit changes, PwC’s Health Research Institute, which conducted the study, projects a net growth rate of 5 percent. Even with employers’ actions, market forces likely will still overrun the efforts to quell them.

Prices, not utilization, are continuing to fuel healthcare spending. Utilization is still being dampened by high deductibles and other cost sharing, but at the expense of employee satisfaction with their health plan. In response, employers are inserting themselves more forcefully into the healthcare delivery equation.

WHAT’S THE IMPACT

Beyond market forces, HRI identified three “inflators” that will, influence the medical cost trend.

One is that drug spending will grow faster. Between 2020 and 2027, retail drug spending under private health insurance is projected to increase at a rate of 3 percent to 6 percent a year as the impact of generics on spending plateaus, biosimilars continue to see slow uptake, and costly new therapies enter the market.

Chronic diseases will also be a major issue. Obesity and Type 2 diabetes continue to produce high rates of hypertension and cardiovascular disease. Sixty percent of adults have a chronic disease, with 40 percent managing two or more. For employers, per capita health spending on someone with a complex chronic illness is eight times that of a healthy person.

Lastly, employers are beginning to recognize the importance of helping their employees manage their mental health and wellbeing. Nearly 75 percent of employers offer mental health disease management programs, the report found. Anytime access is expanded, costs will go up in the short term, though it may have the opposite effect long-term.

And speaking of the opposite effect, there are a few “deflators” HRI recognized that will likely slow down the medical cost trend.

HRI predicts that in 2020, more companies will take action to make sure healthcare is accessible to their employees, opening and expanding clinics as a strategy to control the cost trend. Thirty-eight percent of large employers offered a worksite clinic in 2019, up from 27 percent in 2014.

Also, payers are designing plans to encourage members to choose free-standing facilities and in-home care rather than more expensive sites. How those benefits are designed, and how employees perceive the costs, will shape the effectiveness of site of care strategies. Payers and employers are aiming to grow the role of telemedicine as employees grow more comfortable with it, especially if out-of-pocket costs are lower and the quality doesn’t suffer.

WHAT ELSE YOU SHOULD KNOW

The trend has implications for employers, payers, providers and even pharmaceutical and life science companies.

For payers, it becomes important to  benchmark the prices paid commercially against a common reference point such as Medicare. With this information it’s possible to pursue value-based arrangements with high-performing and lower-cost providers, in addition to negotiating better contracted rates on existing fee-for-service arrangements.

For providers, a value line strategy is necessary as employers and consumers look for high quality care for a low cost. Providers armed with a value line strategy are more likely to be included in health plans’ high-performance networks, and are better positioned to directly contract with employers.

Providers should also understand what risk they can take on to guarantee a health outcome, and the cost structure needed to make them profitable in doing so. Providers should understand and manage both the risk inherent in their ability to deliver care and the risk of the population they’re managing — from health status to the social determinants impacting their health — to help them design appropriate clinical interventions and non-clinical support services.

For employers, it becomes imperative to understand their role as the purchaser of healthcare for employees and join the ranks of employer activists, pursuing new solutions to lower costs, improve access and enhance quality. Pharmaceutical and life science companies, meanwhile, should go beyond the basic outcomes-based arrangements currently in place and consider exploring and expanding alternative financing arrangements, such as subscription models for unlimited access to a product for a set period of time, or a mortgage model to finance expensive specialty drugs over time.

THE LARGER TREND

The PwC study loosely mirrors the findings of an October report from the Altarum Center for Value in Health Care, which found prices and spending in healthcare growing steadily, but at a moderate pace.

The country’s healthcare spending habits are at a level nearly double that of similar countries. Spending per capita in the U.S. is more than $9,000, compared to just over $5,000 in other Western nations, and because prices are growing slowly but steadily, spending is doing the same.

 

 

When a hospital wields monopoly power

Posted on by • Posted in Barriors to Entry, Competition, Health Policy, Health System, High Prices, Hospital, Hospital Industry, Market Consolidation, Market Power, Monopoly, Monopoly Behavior, Non-Profit Healthcare Industry, Operating Margin, Operating Performance, Price Transparency, Pricing • Leave a comment

https://www.axios.com/newsletters/axios-vitals-1b40c794-c913-4681-b2ac-7a6e9746718f.html?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosvitals&stream=top

Illustration of a giant health plus on top of a pile of cash, the ground underneath is cracking.

NorthBay Healthcare, a not-for-profit hospital system in California, recently gave a candid look into how it operates, telling investors it has used its negotiating clout to extract “very lucrative contracts” from health insurance companies.

Why it matters: This is a living example of the economic theories and research that suggest hospitals will charge whatever they want if they have little or no competition, Axios’ Bob Herman reports.

Details: NorthBay owns two hospitals and several clinics in California’s Solano County. Kaiser Permanente owns the only other full-service hospital in the county, and Sutter Health operates some medical offices. (A NorthBay spokesperson argued the system is “more akin to the David among two Goliaths.“)

Three health insurers have terminated their contracts with NorthBay over the past couple years. During a June 19 call with bondholders, executives explained why this has happened.

“We’ve been able to maintain very lucrative contracts without the competition. And what the payers are saying is, they would like us to be like 90% of the rest of the United States in terms of contract structure.”

— Jim Strong, interim CFO, NorthBay Healthcare

Between the lines: NorthBay’s revenue has increased by 50% over the past few years, from $400 million in 2013 to $600 million in 2018, due in large part to its natural monopoly and oligopoly over hospital services.

  • This is exactly what we should expect to happen when sellers have the upper hand over buyers, economists say.

NorthBay also serves as a cautionary tale for price transparency, the policy fix du jour.

  • “If the health care system is consolidated, consumers don’t have anywhere else to go,” said Sunita Desai, a health economist at NYU. “Even if they see the prices of a given hospital, they’re limited in terms of how much they can ‘shop’ across providers.”

 

 

 

Hospital price transparency push draws industry ire, but effects likely limited

Posted on by • Posted in America's Health Insurance Plans, American Hospital Association (AHA), Federation of American Hospitals, Health Insurance Industry, Health Policy, Health System, Hospital, Medical Group Management Association (MGMA), Out of Pocket Expenses, Paperwork Burden, Physician, Physician Practice Management, President Executive Order, Price Transparency, Transparency • Leave a comment

https://www.healthcaredive.com/news/hospital-price-transparency-push-draws-industry-ire-but-effects-likely-lim/557536/

Image result for price transparency

Far-reaching rules mandating industry price transparency could mark a major shift, but experts are skeptical the efforts will meaningfully lower prices for patients without a more fundamental system overhaul.

President Donald Trump’s executive order signed Monday directs HHS and other federal departments to begin rulemaking to require hospitals and payers to release information based on their privately negotiated rates. Providers would also have to give patients estimates of their out-of-pocket costs before a procedure.

The moves come amid efforts from the federal government and Congress to push the healthcare industry to address patient anger over high prices, particularly regarding what medical bills they can expect to receive.

Many details must still be worked out as HHS and CMS craft their proposals, but providers and payers were quick to condemn any notion of making negotiated rates public. A legal challenge to the rules is also likely.

Many policy analysts and economists said that while price transparency is good in theory, current evidence shows patients don’t take advantage of pricing information now available, said Ateev Mehrotra, associate policy of healthcare policy and Harvard Medical School.

Patients are wary of going against a doctor’s advice to undergo a certain procedure or test, and to get it done at a certain facility. A difference in price may not be enough to sway them.

Also, the healthcare system has so many moving parts and unique elements that understanding a medical bill and how the price was calculated is daunting, to say the least.

“That complexity hinders the ability of people to effectively shop for care,” Mehrotra told Healthcare Dive “It’s not like going to Amazon and buying a toothbrush or whatever.”

What the order actual does

The executive order has two main directives:

  • Within 60 days, HHS must propose a regulation “to require hospitals to publicly post standard charge information, including charges and information based on negotiated rates and for common or shoppable items and services, in an easy-to-understand, consumer-friendly, and machine-readable format using consensus-based data standards that will meaningfully inform patients’ decision making and allow patients to compare prices across hospitals.”
  • Within 90 days, HHS and the Departments of Labor and Treasury must solicit comment on a proposal “to require healthcare providers, health insurance issuers, and self-insured group health plans to provide or facilitate access to information about expected out-of-pocket costs for items or services to patients before they receive care.”

The order also outlines smaller steps, including a report from HHS on how the federal government and private companies are impeding quality and price transparency in healthcare and another on measures the White House can take to deter surprise billing.

It also directs federal agencies to increase access to de-identified claims data (an idea strongly favored by policy analysts and researchers) and requires HHS to identify priority databases to be publicly released.

The order requests the Secretary of the Treasury expand coverage options for high-deductible health plans and health savings accounts. It specifically asks the department to explore using HSA funds for direct primary care, an idea Senate HELP Committee Chairman Lamar Alexander, R-Tenn., said he “especially like[d].”

Industry pushes back

The order itself wastes no time in pointing the finger at industry players for current patient frustrations with the system. “Opaque pricing structures may benefit powerful special interest groups, such as large hospital systems and insurance companies, but they generally leave patients and taxpayers worse off than would a more transparent system,” according to the document.

As expected, payer and provider groups slammed any attempt to force them to reveal the rates they negotiate behind closed doors, though they expressed appreciation for the general push toward more transparency.

The American Hospital Association shied away from strong language as details are still being worked out, but did say “publicly posting privately negotiated rates could, in fact, undermine the competitive forces of private market dynamics, and result in increased prices.”

The Federation of American Hospitals took a similar tone in a statement from CEO Chip Kahn. “If implementing regulations take the wrong course, however, it may undercut the way insurers pay for hospital services resulting in higher spending,” he said.

Both hospital groups highlighted more transparency for patient out-of-pocket costs and suggests the onus should be on payers to communicate information on cost-sharing and co-insurance.

Mollie Gelburd, associate director of government affairs at MGMA, which represents physician groups, said doctors don’t want to be in the position of explaining complex insurance terms and rules to a patient.

“While physicians should be encouraged to talk to patients about costs, to unnecessarily have them be doing all this education when they should be doing clinical care, that sort of gets concerning,” she said.

Practices are more concerned about payer provider directories and their accuracy, something not addressed in the executive order. Not having that type of information can be detrimental for a patient seeking care and further regulation in the area could help, Gelburd said.

Regardless, providers will likely view with frustration any regulations that increase their reporting and paperwork burdens, she said.

“I think the efficacy of pricing transparency and reducing healthcare costs, the jury is still out on that,” she said. “But if you have that onerous administrative requirement, that’s certainly going to drive up costs for those practices, especially those smaller practices.”

Payer lobby America’s Health Insurance Plans was quick to voice its opposition to the order.

CEO Matt Eyles said in a statement disclosing privately negotiated rates would “reduce incentives to offer lower rates, creating a floor — not a ceiling — for the prices that hospitals would be willing to accept.” He argued that current tools payers use to inform patients of cost expectations, such as cost calculators, are already offering meaningful help.

AHIP also said the order works against the industry’s efforts to shift to paying for quality instead of quantity. “Requiring price disclosure for thousands of hospital items, services and procedures perpetuates the old days of the American health care system paying for volume over value,” he said. “We know that is a formula for higher costs and worse care for everyone.”

Limited effects

One potential effect of making rates public is that prices would eventually trend toward equalization. That wouldn’t necessarily reduce costs, however, and could actually increase them for some patients. A payer able to negotiate a favorable rate for a specific patient population in a specific geographic area might lose that advantage, for example, Christopher Holt, director of healthcare policy at the conservative leaning American Action Forum, told Healthcare Dive.

John Nicolaou of PA Consulting told Healthcare Dive consumers will need help deciphering whatever information is made available however. Reams of data could offer the average patient little to no insight without payer or third-party tools to analyze and understand the information.

“It starts the process, just publishing that information and just making it available,” he said. “It’s got to be consumable and actionable, and that’s going to take a lot more time.”

The order does require the information being made public be “easy-to-understand” and able to “meaningfully inform patients’ decision making and allow patients to compare prices across hospitals.” That’s far easier said than done, however, Harvard’s Mehrotra said. “We haven’t seen anybody able to put this information in a usable way that patients are able to effectively act upon,” he said.

Holt said patients are also limited in their ability to shop around for healthcare, considering they often have little choice in what insurance company they use. People with employer-based plans typically don’t have the option to switch, and those in the individual market can only do so once a year.

Another aspect to consider is the limited reach of the federal government. CMS can require providers and payers in the Medicare Advantage program, for example, to meet price transparency requirements, but much of the licensing and regulations for payer and providers comes at the state level.

Waiting for details, lawsuits

One of the biggest questions for payers and providers in the wake of Monday’s announcement is how far exactly the rulemaking from HHS will go in mandating transparency. One one end, the requirements could stick close to giving patients information about their expected out-of-pocket costs without revealing the details of payer-provider negotiations. Full transparency, on the other hand, would mean publishing the now-secret negotiated rates for anyone to see.

“I think it’s the start of a much longer process,” Holt said. “It’s going to depend a lot on how much information is going to be required to be divulged and how that’s going to be collected.”

It’s almost certain that as soon as any concrete efforts at implementation are made, lawsuits will follow.

That’s what happened after Ohio passed a price transparency law in 2015 that required providers give patients information on out-of-pocket costs before a procedure — a proposal the executive order also puts forward.

The law still has not been enforced, as it has been caught up in the courts. The Ohio Hospital Association and Ohio State Medical Association sued over the law, arguing it was too vague and could lead to a delay in patient care.

 

The Lessons of Washington State’s Watered Down ‘Public Option’

Posted on by • Posted in 2020 Election Issues, ACA, Health Insurance Industry, Health Policy, Health System, Hospital, Hospital Industry, Medicare Buy-In, Medicare for All, Medicare Rate Setting, Physician, Physician Compensation, Physician Practice Management, Public Option, Public Program With Opt Out, Rate Setting, Single Payer Health System, Single Payer Healthcare System, Universal Healthcare System • Leave a comment

Jay Inslee, the governor of Washington, signing a measure in May that puts the state on track to create the nation’s first “public option” health insurance.

Jay Inslee, the governor of Washington, signing a measure in May that puts the state on track to create the nation’s first “public option” health insurance.

A big health care experiment for Democrats shows how fiercely doctors and hospitals will fight.

For those who dream of universal health care, Washington State looks like a pioneer. As Gov. Jay Inslee pointed out in the first Democratic presidential debate on Wednesday, his state has created the country’s first “public option” — a government-run health plan that would compete with private insurance.

Ten years ago, the idea of a public option was so contentious that Obamacare became law only after the concept was discarded. Now it’s gaining support again, particularly among Democratic candidates like Joe Biden who see it as a more moderate alternative to a Bernie Sanders-style “Medicare for all.”

New Mexico and Colorado are exploring whether they can move faster than Congress and also introduce state-level, public health coverage open to all residents.

But a closer look at the Washington public option signed into law last month, and how it was watered down for passage, is a reminder of why the idea ultimately failed to make it into the Affordable Care Act and gives a preview of the tricky politics of extending the government’s reach into health care.

On one level, the law is a big milestone. It allows the state to regulate some health care prices, a crucial feature of congressional public option and single-payer plans.

But the law also made big compromises that experts say will make it less powerful. To gain enough political support to pass, health care prices were set significantly higher than drafters originally hoped.

“It started out as a very aggressive effort to push down prices to Medicare levels, and ended up something quite a bit more modest,” said Larry Levitt, senior vice president for health reform at the Kaiser Family Foundation.

So while Washington is on track to have a public option soon, it may not deliver the steep premium cuts that supporters want. The state estimates that individual market premiums will fall 5 percent to 10 percent when the new public plan begins.

“This bill is important, but it’s also relatively modest,” said David Frockt, the state senator who sponsored the bill. “When I see candidates talking about the public option, I don’t think they’re really grasping the level of opposition they’re going to face.”

During the Affordable Care Act debate, more liberal Democrats hoped a public option would reduce the uninsured rate by offering lower premiums and putting competitive pressure on private plans to do the same. President Obama backed it, saying in 2009 that such a policy would “keep the private sector honest.”

The public option came under fierce attack from the health care industry. Private health plans in particular did not look forward to competing against a new public insurer that offered lower rates, and fought against a government-run plan that they said “would significantly disrupt the coverage that people currently rely on.” The policy narrowly fell out of the health care law but never left the policy debate.

Congressional Democrats have started to revisit the idea in the past year, with health care as a top policy issue in the 2018 midterm elections.

“During the midterm elections, Medicare for all was gaining a lot of traction,” said Eileen Cody, the Washington state legislator who introduced the first version of the public option bill. “After the election, we had to decide, what do we want to do about it?”

Ms. Cody introduced a bill in January to create a public option that would pay hospitals and doctors the same prices as Medicare does, which is also how many congressional public option proposals would set fees. The Washington State Health Benefit Exchange, the marketplace that manages individual Affordable Care Act plans, estimates that private plans currently pay 174 percent of Medicare fees, making the proposed rates a steep payment cut.

“I felt that capping the rates was very important,” Ms. Cody said.“If we didn’t start somewhere, then the rates were going to keep going up.”

Doctors and hospitals in Washington lobbied against the rate regulation, arguing that they rely on private insurers’ higher payment rates to keep their doors open while still accepting patients from Medicaid, the public plan that covers lower-income Americans and generally pays lower rates.

“Politically, we were trying to be in every conversation,” says Jennifer Hanscom, executive director of the Washington State Medical Association, which lobbies on behalf of doctors. “We were trying to be in the room, saying rate setting doesn’t work for us — let’s consider some other options. As soon as it was put in the bill, that’s where our opposition started to solidify.”

Legislators were in a policy bind. The whole point of the public option was to reduce premiums by cutting health care prices. But if they cut the prices too much, they risked a revolt. Doctors and hospitals could snub the new plan, declining to participate in the network.

“The whole debate was about the rate mechanism,” said Mr. Frockt, the state senator. “With the original bill, with Medicare rates, there was strong opposition from all quarters. The insurers, the hospitals, the doctors, everybody.”

Mr. Frockt and his colleagues ultimately raised the fees for the public option up to 160 percent of Medicare rates.

“I don’t think the bill would have passed at Medicare rates,” Mr. Frockt said. “I think having the Medicare-plus rates was crucial to getting the final few votes.”

Other elements of the Washington State plan could further weaken the public option. Instead of starting an insurance company from scratch, the state decided to contract with private insurers to run the day-to-day operations of the new plan.

“It would have cost the state hundreds of millions of dollars just to operate the plan,” said Jason McGill, who recently served as a senior health policy adviser to Mr. Inslee. He noted that insurers were required to maintain large financial reserves, to ensure they don’t go bankrupt if a few patients have especially costly medical bills.

“Why would we do that when there are already insurers that do that? It just didn’t make financial sense. It may one day, and we’ll stay on top of this, but we’re not willing to totally mothball the health care system quite yet.”

Hospitals and doctors will also get to decide whether to participate in the new plan, which pays lower prices than private competitors. The state decided to make participation voluntary, although state officials say they will consider revisiting that if they’re unable to build a strong network of health care providers.

Most federal versions of the public option would give patients access to Medicare’s expansive network of doctors and hospitals.

Although Mr. Frockt is proud of the new bill, he’s also measured in describing how it will affect his state’s residents. After going through the process of passing the country’s first public option, he’s cautious in his expectations for what a future president and Democratic Congress might be able to achieve. But he does have a clearer sense of what the debate will be like, and where it will focus.

“This is a core debate in the Democratic Party: Do we build on the current system, or do we move to a universal system and how do we get there?” he said. “I think the rate-setting issue is going to be vital. It’s what this is all about.”

 

 

Hospitals as medical debt litigators

Posted on by • Posted in Debt Collection, Health Policy, Health System, Hospital, Non-Profit Healthcare Industry, Rev Cycle Management, Tax Exempt Status, Wage Garnishment • Leave a comment

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Illustration of rope lassoing a hospital bill.

Tax-exempt hospitals are again raising eyebrows over how they harass patients, often the poorest, in court by trying to recoup medical debts, my colleague Bob Herman writes.

Driving the news: ProPublica and MLK50 published a deep dive yesterday on Methodist Le Bonheur Healthcare, a $2 billion not-for-profit and faith-based hospital system in Tennessee that has filed more than 8,300 lawsuits against patients over the past 5 years.

  • One of the patients featured in the story made less than $14,000 last year, and Methodist is suing her for more than $33,000. The hospital operates in the second-poorest large metropolitan area in the nation.
  • Methodist obtained wage garnishment orders in almost half of the cases it filed between 2014 and 2018, meaning that the debtor’s employer was required to send the court a portion of the worker’s after-tax income.

Between the lines: As we wrote this week, hospitals taking patients to court is both common and longstanding.

The bottom line: Not-for-profit hospitals market themselves as charities, but they act more like for-profit peers — renewing questions of whether those organizations’ tax exemptions are justified.

  • Coincidentally, the American Hospital Association released a paper Thursday touting hospitals’ community benefits, but the paper has some of the same flaws as prior analyses.

What we’re watching: These practices have drawn the ire of Sen. Chuck Grassley, who is now chairman of the powerful Finance Committee.

  • “Such hospitals seem to forget that tax exemption is a privilege, not a right. In addition to withholding financial assistance to low-income patients, they give top executives salaries on par with their for-profit counterparts,” Grassley wrote in a 2017 op-ed.

 

 

 

Piedmont now requires 25% advance payment for self-pay patients

Posted on by • Posted in Back-End Collection, Bad Debt Expense, Consumer Advocacy, Front-End Collection, Health System, Hospital, Inability to Pay, Point of Service Collections, Pre-Payment Policies, Rev Cycle Management, Unwillingness to Pay • Leave a comment

https://www.modernhealthcare.com/payment/piedmont-now-requires-25-advance-payment-self-pay-patients?utm_source=promote-editorial&utm_medium=email&utm_campaign=Exclusive&utm_content=06262019

Piedmont Healthcare is taking a bold approach in its fight against bad debt: The not-for-profit health system now requires patients who’ll be on the hook for the entirety of their bill to pay one-quarter of it before they can receive non-emergent services.

Atlanta-based Piedmont launched the advance payment policy this month. It requires uninsured, self-pay patients and those with high-deductible commercial policies to pay 25% of their bill before they can receive services.

“To move to point-of-service collections is a big shift,” said Joseph Fifer, CEO of the Healthcare Financial Management Association. “To do it even beforehand, that’s even a bigger movement, given where we’re starting from.”

Leaders from Piedmont’s revenue-cycle team told Modern Healthcare in an interview at the HFMA’s annual conference in Orlando, Fla., that the new policy is the latest phase in what has been five years of improved patient education around out-of-pocket costs, including sending patients price estimates—even if patients didn’t ask for them—prior to almost all services.

But they acknowledge not everyone will welcome the change.

“As much as people in healthcare want transparency, they get uncomfortable when you start talking about requirements for things, because requirements mean that a patient may hear ‘no’ to their healthcare,” said Andrea Mejia, Piedmont’s executive director of patient financial care and revenue cycle, “so that gets controversial.”

Like many of its peers, 11-hospital Piedmont shoulders a heavy bad-debt load, or bills that go unpaid that the system expected to be paid, as health insurers increasingly require patients to foot bigger portions of their bills.

The health system’s $250.7 million bad-debt expense in fiscal 2018 was about 8% of its $3 billion in revenue that year—up from 6.5% of revenue the prior year and much higher than the 2% national average the American Hospital Directory calculated in 2017.

Not-for-profit hospitals’ bad debt is projected to increase at least 8% this year as the high-deductible health plan trend continues, according to Moody’s Investors Service.

Requiring upfront payment is relatively common at physician practices. Some hospitals likely employ the tactic, too, but they’re unlikely to publicize such policies, said Jonathan Wiik, healthcare strategy principal with TransUnion Healthcare.

The HFMA’s Fifer said he couldn’t think of examples of other health systems that have implemented blanket pre-pay policies like Piedmont’s, and said he doesn’t think it’s prevalent.

He called it a “major shift” in an industry that’s long been too focused on back-end collection.

UPMC in Pittsburgh earlier this month scrapped its plan to seek pre-payment from out-of-network Highmark Medicare Advantage members once the academic health system’s consent decrees with Highmark end on June 30.

Effect on access

Piedmont’s Mejia said the policy’s potential to dissuade patients from receiving necessary care for serious conditions is “a very legitimate concern.”

The policy raises red flags, said Berneta Haynes, senior director of policy and access with the consumer advocacy group Georgia Watch. She said she fears it could hamper access to care and take away patients’ ability to negotiate. “It does have the potential to become a real impediment for folks seeking healthcare,” she said.

It’s not unheard of for hospitals to create pre-payment rules, said Mark Rukavina, business development manager in Community Catalyst’s Center for Consumer Engagement in Health Innovation. When they do, leaders need to ensure the rules don’t create barriers to care. That means screening for financial assistance, informing patients of the financial assistance policy and making exceptions when necessary, such as for cancer patients.

“These kinds of payments, especially if you’re dealing with larger bills, are certainly going to have a chilling effect on people and their willingness or ability to access care,” Rukavina said.

Brian Unell, Piedmont’s vice president of revenue cycle, said the new advance payment policy allows Piedmont’s physicians to escalate cases to administration in situations where patients need care urgently, such as for cancer treatment.

“That’s been the biggest lesson learned so far and pushback we’ve gotten,” he said.

There’s currently no ceiling amount on what patients could be forced to pay before receiving services, but Unell said the system would probably make an exception if 25% ended up being $2,500, for example. Piedmont discounts its billed charges by 70% for self-pay patients.

Final step in collections

The new policy is the third in a three-phase collection policy Piedmont has implemented since late 2017. The first phase was 15% pre-pay requirement for walk-in visits, including lab tests and X-rays. It did not apply to the system’s urgent-care clinics. Officials said they wanted to implement the policy in few facilities. The second phase expanded the 15% requirement to scheduled services like surgeries.

For policies like Piedmont’s to be successful, they need to have very good relationships with their referring physicians, TransUnion’s Wiik said. The rub tends to enter when physicians argue that their patients aren’t getting medically necessary services, he said.

In Piedmont’s case, the policy also has the unintended effect of competing with its physicians, some of whom have their own pre-payment policies, Unell said.

Wiik argues that if patients were truly unable to pay the bill, the hospital’s financial assistance policy or Medicaid eligibility would kick in.

“Do you have an inability or an unwillingness to pay?” he said. “There’s a difference.”

Policies like Piedmont’s can be tricky, but the benefit is that they find patients who really can pay who may not have otherwise paid, Wiik said.

While one goal of Piedmont’s policy is probably cash flow, the HFMA’s Fifer said his hunch is the primary driver is engaging patients in a conversation about financial responsibility.

Piedmont has increased its same-store, upfront collections by about 500% since 2014 thanks to revenue cycle improvements it has made in that time, Unell said. The health system has also expanded its back-end patient financing options, including moving more toward monthly payments. The system does not offer discounts to patients who agree to pay in a lump sum right away.

Unell described Piedmont’s revenue-cycle work as a journey, and said the system is constantly evolving based on new information.

“None of this is easy,” Unell said, “and by no means do we have it figured out.”

 

 

 

Medical monopoly: An unusual hospital merger in rural Appalachia leaves residents with few options

Posted on by • Posted in Antitrust, Federal Trade Commission (FTC), Health Policy, Health System, Hospital, Hospital Bankruptcy, Monopoly, Monopoly Behavior, Rural Health, Rural Hospital, Safety Net Hospitals, Safety-Net Providers • Leave a comment

https://www.tennessean.com/story/news/health/2019/06/23/ballad-health-merger-rural-hospital-closures/1342608001/

Protest organizer Dani Cook of Kingsport, Tennessee, conducts a Facebook Live outside Holston Valley Medical Center in Kingsport on May 7. The merger of Mountain State Health Alliance and Wellmont has led to the downgrading of the area's NICU and trauma center.

KINGSPORT, Tenn. – Molly Worley is an angry grandma.

For weeks she has stubbornly occupied a folding lawn chair on a grassy median outside Holston Valley Medical Center, sheltered from sweltering Appalachian summer sun by a thin tarp and flanked by a rotating crew staging a round-the-clock protest since May 1.

Behind them is the state-of-the-art neonatal intensive care unit where Worley’s newborn grandson spent his first weeks of life treated for opioid exposure.

In the same building is a Level I trauma center to respond to the most critical emergencies.

Both facilities will downgraded in the coming months, diverting the sickest babies and adults elsewhere.

The cuts are the latest fallout from an unusual and controversial merger between two former rival hospital systems headquartered in northeast Tennessee.

The newly formed company, Ballad Health, is now the sole hospital provider for a region the size of New Jersey. For nearly 1.2 million people people living in a largely rural stretch of 29 counties in northeast Tennessee and nearby parts of Virginia, North Carolina and Kentucky, Ballad hospitals are the only inpatient option.

Mergers involving hospitals that compete for same patients face opposition from the Federal Trade Commission, which can block mergers on the grounds the combined company can limit patient choices, cut services, raise prices and diminish quality.

Ballad officials found a way to bypass FTC rules. They turned to Tennessee state Sen. Rusty Crowe, R-Johnson City, who successfully carried legislation making the merger possible. Crowe is a longtime paid consultant with Ballad hospitals. 

Only a handful of other states have exempted similar hospital mergers from FTC anti-monopoly rules. Ballad’s is the largest.

CEO Alan Levine said the merger lets the hospital system save money and keep rural hospitals afloat in a state that is already No. 2 in the nation for closures.

Eliminating overlapping staff and services, including the trauma center and NICU, will free funds to invest in other public health initiatives. Ballad pledged to keep open all of its rural hospitals for five years and to invest $308 million in public health, medical education and other initiatives.

“Every decision we make starts and ends with how can we best serve the community and what does the evidence show will lead to the best possible outcome,” Levine said.

“You don’t want a trauma center on every corner and you don’t want a NICU on every corner because it dilutes volume and hurts quality,” he said.

No rural hospitals owned by Ballad have been closed. 

Some residents, doctors, nurses, EMS workers and public officials say the changes by Ballad expose the dangers of a single system imposing decisions on health care services on a captive audience that has no other options. More than 23,000 people have signed a petition opposing Ballad’s proposed changes.

“Never ever have I been this outspoken about anything,” said Worley, 60. “This NICU saved my grandson’s life. With Ballad we have no other choice. They have a monopoly at every level of health care.”

As hospital systems across the country struggle to stay afloat, particularly in rural areas, Ballad’s plan is being closely watched by other states weighing whether to allow other hospitals to take a similar approach.

 

 

 

SUPREME COURT TAKES UP $12B DISPUTE OVER ACA RISK CORRIDOR PAYMENTS

Posted on by • Posted in ACA, ACA Risk Corridor Payments, Center for Medicare and Medicaid Services (CMS), Dept of Health and Human Services (HHS), Government Accountability Office, Health Insurance Industry, Health Policy, Health System, Hospital, Individual Health Insurance, Supreme Court • Leave a comment

https://www.healthleadersmedia.com/finance/supreme-court-takes-12b-dispute-over-aca-risk-corridor-payments

U.S. Supreme Court

The justices agreed to hear arguments over whether Congress can pass riders that withhold funds in contravention of the relevant law’s intent without actually repealing the relevant law.

KEY TAKEAWAYS

The health plans argue the ACA’s mandate to issue risk corridor payments could not be repealed through an appropriations rider.

The approximately $12 billion in payments at issue in this dispute are for three benefit years: 2014-2016.

The U.S. Supreme Court agreed Monday to take up three consolidated cases from health plans challenging Congress’ refusal to authorize $12 billion in risk-mitigation payments under the Affordable Care Act.

The cases—which were brought by Maine Community Health Options, Moda Health Plan Inc., and Land of Lincoln Mutual Health Insurance Co.—argue that the ACA’s risk corridor program obligated Health and Human Services to make payments that the law intended “to induce insurer participation in the health insurance exchanges by mitigating some of the uncertainty associated with insuring formerly uninsured customers.”

Following the 2014 midterm election, lawmakers on Capitol Hill enacted an appropriations law for fiscal year 2015 that “would potentially allot money to HHS to cover” any such payments for the 2014 benefit year, but the law included a rider that required HHS to maintain the budget neutrality of the risk corridor program, the health plans said in their petition.

Because the amounts collected under the risk corridor program for 2014 “came nowhere close to what the government owed to insurers,” the government paid out only 12.6% of the total owed for the year, prorating the funds it owed to each insurer, the health plans wrote.

Similar riders were included in appropriations bills for fiscal years 2016 and 2017. But HHS used the funds it collected from benefit years 2015 and 2016 to further pay what it owed from the 2014 benefit year, making no payments for the 2015 and 2016 benefit years, the health plans wrote. (The program ended after three years.)

The health plans proposed two questions in the petition for a writ of certiorari for the justices to consider, but the justices agreed to hear argument only on the first: “Given the ‘cardinal rule’ disfavoring implied repeals—which applies with ‘especial force’ to appropriations acts and requires that repeal not be found unless the later enactment is ‘irreconcilable’ with the former—can an appropriations rider whose text bars the agency’s use of certain funds to pay a statutory obligation, but does not repeal or amend the statutory obligation, and is thus not inconsistent with it, nonetheless be held to impliedly repeal the obligation by elevating the perceived ‘intent’ of the rider (drawn from unilluminating legislative history) above its text, and the text of the underlying statute?”

In its response to the health plans’ petition, the U.S. government argued that a Government Accountability Office report identified only two possible sources of funding for the risk corridor payments: (1) the funds collected by HHS under the program itself, and (2) any lump-sum appropriation to manage certain Centers for Medicare & Medicaid Services programs. By enacting the appropriations laws as it did, Congress said that only the first funding source would be allowed, the response states.

America’s Health Insurance Plans (AHIP) President and CEO Matt Eyles said in a statement that insurers need stability from the government.

“Millions of Americans rely on the individual and small group markets for their coverage and care. Health insurance providers are committed to serving these patients and consumers, working with the federal government to deliver affordable coverage and access to quality care,” Eyles said. “The Supreme Court’s decision to hear this case recognizes how important it is for American businesses, including health insurance providers, to be able to rely on the federal government as a fair and reliable partner. Strong, stable and predictable partnerships between the private and the public sector are an essential part of our nation’s economy, and our industry looks forward to having this matter heard before the Court.”

The justices allotted one hour for oral argument on the dispute.

 

 

 

Nurse viewpoint: Modern healthcare system prioritizes profits over care quality

Posted on by • Posted in 2020 Election Issues, Health Policy, Health System, Hospital, Life-Saving Devices, Medicare for All, Operating Margin, Operating Performance, Outcomes, Pharmaceutical Industry, Quality of Care • Tagged • Leave a comment

https://www.beckershospitalreview.com/quality/nurse-viewpoint-modern-healthcare-system-prioritizes-profits-over-care-quality.html

The American healthcare system benefits companies, hospital systems and administrators over patients and providers, wrote Theresa Brown, PhD, BSN, RN, in an op-ed for CNN.

 Five highlights from Dr. Brown’s opinion piece:

1. Providers work in an environment of “scarcity,” whereas CEOs, pharmaceutical companies and hospital systems live in “a world of plenty.”

2. Dr. Brown cites her own experience at a teaching hospital in the University of Pittsburgh Medical Center system, where she says nurses who requested more life-saving devices were told to do “more with less,” despite the hospital system’s multibillion-dollar revenues.

3. Dr. Brown writes nurses at the teaching hospital also faced staff shortages, which have been shown to negatively affect patient health outcomes.

4. In contrast, 14 pharmaceutical companies made profits of at least $1 billion in 2018. Yet Dr. Brown argues that vilifying such companies misinterprets the problem, which is the long line separating cash-strapped hospital floors from the large profits that benefit systems, companies and administrators over patients.

5. Dr. Brown supports Medicare for All, writing that it is a critical measure for the 66 percent of American households that say they must choose between purchasing food and healthcare.

 

 

5 Ways Technology is Transforming the Healthcare Industry

Posted on by • Posted in Artificial Intelligence, Change, Change Management, Eye Diseases, Health Policy, Health System, Heat Disease, Hospital, Information Technology, Skin Cancer, Stokes • Leave a comment

5 Ways Technology is Transforming the Healthcare Industry

5 Ways Technology is Transforming the Healthcare Industry