The American Hospital Association (AHA) is asking Congress for an additional $25B to help hospitals offset high labor costs, largely incurred by the need to rely on travel nurse staffing firms that charge two to three times pre-pandemic rates. The AHA, along with 200 members of Congress, is urging the Federal Trade Commission to investigate the staffing agencies for anti-competitive activity, although the agency has previously declined to do so.
The Gist: The Department of Health and Human Services (HHS) is now releasing$2B in of provider relief dollars from the CARES Act. Beyond that, after nearly two years and $178B of federal support, hospitals shouldn’t count on additional funds from the government, even as costs of labor and supplies continue to rise.
Instead, we’d expect more scrutinyover how the remaining relief dollars are spent. Federal support during the pandemic has masked structural economic flaws in provider economics, and we expect 2022 will be a year of financial reckoning for many hospitals and health systems.
Physicians employed by group practices owned by health systems are mostly paid based on the volume of care, despite recent insurance companies’ efforts to pay based on quality, a Jan. 28 Rand study published in Jama Health Forum found.
Seventy percent of practices follow a volume-based compensation plan, according to the analysis. For more than 80 percent of primary care physicians and more than 90 percent of physician specialists, volume-based compensation is the most common.
Although many health systems have financial incentives for quality and cost, only 9 percent of primary care providers and 5 percent of specialists have compensation based on those criteria.
“Despite growth in value-based programs and the need to improve value in healthcare, physician compensation arrangements in health systems do not currently emphasize value,” Rachel Reid, the study’s lead author and a physician policy researcher at Rand, a nonprofit research organization, said in a news release emailed to Becker’s. “The payment systems that are most often in place are designed to maximize health system revenue by incentivizing providers within the system to deliver more services.”
The study looked at physician payment structures for 31 physician organizations affiliated with 22 health systems across four states. The researchers interviewed leaders, examined compensation documents and surveyed physician practices.
The California Assembly is poised to vote on a bill Jan. 31 that aims to create a single-payer healthcare system in the state — the bill’s first major battle since a funding proposal for the program was introduced Jan. 6 — according to KTVU FOX 2.
The state’s plan to create a universal healthcare system involves two bills — AB 1400 and ACA 11 — that would implement and subsequently fund the program, dubbed CalCare. The Assembly is expected to only vote on AB 1400 on Jan. 31.
The Assembly must pass the bill Jan. 31 if it hopes to pass the single-payer framework bill by the end of the year. If the bill passes in the Assembly, it would then need approval in the Senate and from voters.
The plan is being met with public pressure that believesthe system would “create a new and exorbitantly expensive government bureaucracy.” Lawmaker opposition also largely focuses on the bill’s cost, which would be between $314 billion and $391 billion annually, according to KTVU. The bill’s funding counterpart, ACA 11, proposes to pay for it with a tax increase on businesses and high-earning individuals.
However, proponents argue that CalCare would cost less than the state’s current system, which equates to $517 billion when considering both taxes and household spending.
A Colorado mom got quite the shock when she received a hefty “facility fee” bill for her toddler’s telehealth appointment.
Brittany Tesso said she had already paid a bill from Children’s Hospital Colorado for $676.86 for the 2-hour virtual visit for her 3-year-old son to determine if he required speech therapy, according to a report by KDVR, a Colorado TV station.
But 2 weeks later, she received a separate bill for an additional $847.35, leading Tesso to tell the station: “I would’ve gone elsewhere if they had told me there was an $850 fee, essentially for a Zoom call.”
Tesso said she was told the additional amount was for a “facility fee.”
“I was like, ‘Facility fee? I didn’t go to your facility,'” Tesso told the station. “I was at home and, as far as I could tell, some of the doctors were at home too.” Tesso said she was told by a hospital representative that it charges the same fee whether patients come to the facility or receive care via telehealth.
KDVR had reported an earlier story of a father who said he was charged a $503 facility fee after his son was seen at a medical practice in a building owned by Children’s Hospital Colorado, and roughly 20 viewers reached out to the news outlet about their similar experiences.
Tesso told KDVR that she believed the second bill was a surprise bill, and suggested that state lawmakers could do more to prevent such instances. An HHS rule banning surprise billing went into effect on January 1 of this year.
Adam Fox, deputy director at the Colorado Consumer Health Initiative, told KDVR that patients have little recourse because there are no regulations in the state regarding facility fees charged by hospitals.
In a statement provided to KDVR, Children’s Hospital Colorado said that the issue was not exclusive to the hospital, and that it continually looks at its own practices “to see where it can adjust and improve.”
The hospital added in the statement that it continues “to advocate for state and federal policies that address healthcare consumer cost concerns through more affordable and accessible insurance coverage and hospital and provider price transparency, while also defending children’s access to care and the unique needs of a pediatric hospital.”
In response to a MedPage Today request for comment, the hospital said it had no further information to share.
Telehealth is likely to remain a mainstay in healthcare delivery, according to a December Kaiser Health News (KHN) article, but experts also told KHN that it’s not yet clear how such appointments, and any accompanying facility fees, will be handled moving forward.
CMS is preparing to enforce its vaccine mandate for health care workers, but the agency may not have an accurate count of how many remain unvaccinated—and five health systems are pushing back on federal hospital vaccination data, calling it “extremely erroneous,” Cheryl Clark writes for MedPage Today.
Background
The Supreme Court earlier this month ruled that CMS could require most health care workers to be vaccinated against Covid-19—but U.S. officials currently do not know exactly how many workers remain unvaccinated, primarily due to a lack of reliable immunization data.
At the end of December, CDC reported that 77.6% of hospital workers were fully vaccinated. However, that figure was based on data from only about 40% of the nation’s hospitals. Hospitals currently send vaccination data to the agency on a voluntary basis, but beginning May 15, they will be required to send in weekly data, just like nursing homes have been.
According to Janis Orlowski, chief health care officer at the Association of American Medical Colleges (AAMC), CDC’s data is likely representative of providers nationwide, as an AAMC survey of 125 academic hospitals found similar results. More than 99% of doctors and close to 90% of nurses were vaccinated, she said, but vaccination rates dropped off to the 30% to 40% range for those in more operational roles, such as transportation and food service workers.
Is federal vaccination data for hospitals inaccurate?
Further adding to the confusion about health care workers’ vaccination rates are potential inaccuracies in a federal database that tracks Covid-19 vaccinations among workers in hospitals across the country. According to five health systems listed as having the highest numbers of unvaccinated workers, the database is “extremely erroneous,” Clark writes.
In the database, Adventist Health Orlando (AHO) is shown to have 18,576 unvaccinated workers, 637 partially vaccinated workers, and 25,253 fully vaccinated workers. However, Jeff Grainger, director of external communications for AdventHealth in Central Florida, said those numbers weren’t possible since the organization “[doesn’t] have 44,000 employees in one hospital.” He added that 96% of AHO’s team members have already complied with CMS’ mandate.
The University of Illinois Hospital (UI) was listed in the database as having 12,049 unvaccinated workers and 272 partially vaccinated workers. Jacqueline Carey, from health system’s public affairs department, disputed these numbers, saying UI had 6,530 workers as of Jan. 19, with 96% of them fully vaccinated. The remainder were either partially vaccinated or had approved exemptions.
The hospital with the third highest number of unvaccinated workers was Mount Sinai Hospital, Clark writes, but Lucia Lee, a hospital spokesperson, said the federal data was inaccurate. According to Lee, Mount Sinai Health System, of which the hospital is a part, has vaccinated 99% of its more than 43,000 employees.
A representative for Ochsner Medical Center, which is listed as having the fourth highest number of unvaccinated workers, also pushed back on the statistics in the database. Currently, 99.57% of Ochsner’s over 34,000 employees are compliant with its Covid-19 policy, with 95% of workers Ochsner Health and Ochsner LSU Health Shreveport fully vaccinated.
Finally, Kena Lewis, a spokesperson for Orlando Regional Medical Center, said that federal data showing the hospital has 44,154 workers is inaccurate. Instead, she said the hospital is one of 10 in the Orlando network, which has 23,709 total employees. Although Lewis did not give the health system’s vaccination rates, she said it “continues to review the guidelines regarding Covid-19 vaccination requirements for health care organizations and will take appropriate steps.”
Although it is not clear why there are discrepancies between the federal data and what these health systems are reporting regarding vaccination rates, there are some potential explanations, Clark writes.
According to Carey, the federal database only includes vaccination information provided by the UI health system and employee health services. This means that vaccinations workers received elsewhere, such as through a personal provider or pharmacy, are not included in the data, and they will show up as being unvaccinated.
Separately, a spokesperson for another of the five organizations told Clark on background that short-term nursing staff contracted through agencies may show up as unvaccinated in the federal database. Although the agencies assure employers the nurses are vaccinated, hospitals do not independently verify this information.
The Massachusetts Health Policy Commission has unanimously voted to hold Mass General Brigham accountable for its spending and is requiring the health system to develop and implement a performance improvement plan that will result in cost-saving reforms.
The proposed performance improvement plan must contain specific cost-reducing action steps, savings goals, process and outcome metrics, timetables, and supporting evidence, among other requirements.
MGB has 45 days to file the proposed performance improvement plan with the HPC, request a waiver from the requirement, or request an extension of the filing deadline.
From 2014 to 2019, MGB had a larger, cumulative commercial spending in excess of the benchmark than any other provider, totaling $293 million, the HPC said. MGB’s ongoing cost-control strategies have not reduced its commercial spending growth to below-benchmark rates, the HPC Board said.
MGB is seeking to spend nearly $2.3 billion in Massachusetts on expansions and improvements at two of its hospitals and on the creation of three new ambulatory sites in the communities of Westborough, Westwood, and Woburn, Massachusetts.
“Mass General Brigham has a spending problem,” HPC Chair Dr. Stuart Altman said by statement. “Its spending performance and plan for new expansions at their flagship hospitals and into the Boston suburbs raise significant concerns, as documented by the HPC today.”
The HPC’s analyses found that these expansions would increase commercial healthcare spending by at least $46 million to $90.1 million and translate into higher commercial insurance premiums for Massachusetts residents, families and businesses.
The HPC also said this would impact healthcare access and equity as care shifts to MGB providers from other providers in Massachusetts. Other providers are anticipated to lose $153 million to $261 million in commercial revenue each year. These other providers have fewer financial resources and lower average prices for commercially insured patients and they generally serve larger proportions of MassHealth patients and communities with higher social needs than MGB, HPC said.
Based on these findings, the HPC concluded these expansions are inconsistent with the Commonwealth’s healthcare cost containment goals.
The HPC’s Board took separate action, voting unanimously to issue a public comment detailing its analyses of the three expansion proposals currently under review by the Massachusetts Department of Public Health Determination of Need Program.
WHY THIS MATTERS
MGB includes two academic medical centers and is the largest and generally highest-priced system in the Commonwealth, HPC said.
The HPC’s findings and conclusions stand in contrast to those of Independent Cost Analyses that were conducted by a third-party vendor and released on December 28, 2021, which conclude that all three projects are consistent with the Commonwealth’s cost containment goals.
The December cost analysis, part of the determination of need process, projected those three sites would result in a “small overall decrease” in healthcare spending, MGB said, according to WGBH. Its proposed suburban locations would give its existing patients a lower-cost option than hospital care and save them a drive into Boston, the report said.
“Today’s comments by the Health Policy Commission ignore this state’s crippling healthcare capacity crisis — which preceded the pandemic, as well as the fact that patients deserve the choice to access high quality care, closer to their homes, at a lower cost,” MGB said, according to the report.
THE LARGER TREND
Massachusetts established the Health Policy Commission in 2012 as an independent government agency to lead collective efforts to make healthcare more affordable for residents.
This is the first performance improvement plan to be required from a provider or health plan by the HPC.
Welcome to Wednesday’s Overnight Health Care, where we’re following the latest moves on policy and news affecting your health. Subscribe here: thehill.com/newsletter-signup.
Masks come to the Super Bowl: Fans attending the big game next month will be given KN95 masks.
Despite omicron being less severe on average, the sheer number of cases has driven deaths past the peak from last year’s delta surge.
The average number of U.S. COVID-19 deaths this week surpassed the height of the delta surge earlier this fall and is at its highest point since last winter, when the nation was coming out of the peak winter surge.
The seven-day average of deaths hit 2,166 on Monday, according to the latest data from the Centers for Disease Control and Prevention (CDC). Average daily deaths in mid-September before the omicron variant was discovered peaked at around 1,900.
While increasing evidence shows omicron may be less likely to cause death or serious illness than delta, the sheer infectiousness and the speed at which it spreads has overwhelmed hospitals, primarily with people who have not been vaccinated.
The U.S. saw the highest numbers of deaths in the pandemic just over a year ago, before vaccines were widely available, when the daily average reached 3,400. The last time the U.S. topped 2,000 deaths was last February, as the country was slowly coming down from the January peak.
Caution urged: Infections are falling in states that were hardest hit earlier, as well as broadly across the nation. Hospitalizations are also falling, but deaths are a lagging indicator and are still increasing. CDC Director Rochelle Walsenky said deaths have increased about 21 percent over the past week.
The fact that the omicron variant tends to cause less severe disease on average also helped avoid an even greater crisis that would have occurred if it was as severe as the delta variant.
Overall health sector M&A activity bounced back in 2021 across nearly every subsector except one: hospitals, which saw a significant decrease in deal volume. Drawing on data from Kaufman Hall, the graphic above shows the scale of the most recent wave of health system consolidation, driven by last year’s eight “mega-mergers” between entities with over $1B in annual revenue each.
While the total number of hospital transactions decreased, the average seller size increased, with the total valuation of all hospital M&A activity nearly tripling from 2020 to 2021. With a dwindling number of independent hospitals left, health systems are pursuing larger combinations with their peers, to achieve greater scale and maintain economic “relevance.”
But as systems who have struggled to complete such mergers can attest, getting a larger deal across the finish line isn’t easy. The path to hospital consolidation now hinges on navigating complex organizational structures and issues of cultural compatibility, in addition to simply identifying “synergies” and avoiding antitrust pitfalls.
Workers in New Jersey healthcare facilities and high-risk congregate settings like hospitals and nursing homes will be required to be up to date with their COVID-19 vaccinations, including a booster, Gov. Phil Murphy announced Jan. 19.
Mr. Murphy said there would no longer be an option to opt out of vaccination through testing, except for the purposes of providing an accommodation for people exempt from vaccination.
New Jersey healthcare facilities’ covered workers subject to the CMS vaccination mandate for healthcare settings were already required to ensure covered employees received at least one vaccine by Jan. 27 and completed their primary vaccine series by Feb. 28. Mr. Murphy said the state is now requiring proof that these workers are up to date with their vaccination by Feb. 28, which also includes any booster shots for which they are eligible. Noncompliant workers risk losing their jobs.
Workers at covered healthcare settings not subject to the CMS mandate and covered high-risk congregate settings like prisons and jails have until Feb. 16 to receive their first dose of the primary vaccine series and must submit proof that they are up to date with their vaccination by March 30. Mr. Murphy said workers who become newly eligible for a booster after the two deadlines must submit proof of their booster shot within three weeks of becoming eligible.
“With the highly transmissible omicron variant spreading across the country and New Jersey, it is essential that we do everything we can to protect our most vulnerable populations,” Mr. Murphy said in a news release. “With immunity waning approximately five months after a primary COVID-19 vaccination, receiving a booster dose is necessary to protect yourself and those around you. It is critically important that we slow the spread throughout our healthcare and congregate settings in order to protect our vulnerable populations and the staff that care for them.”
The rule in New Jersey, which was issued through an executive order, comes after New York and California also announced booster requirements for healthcare staff.
Omicron and staffing constraints pushed hospitals and health systems to once again suspend nonurgent, elective procedures — a move that hurts patients and their care teams.
Physicians told The Washington Post that notifying patients of their surgeries being postponed is one of the most difficult things they do during the pandemic, and the idea of prolonging patients’ suffering is anguishing. In interviews, a patient rated the pain he felt from a ruptured cervical disk — for which his surgery has been indefinitely postponed at Mercy Health-St. Rita’s Medical Center in Lima, Ohio — as a 12 out of 10.
In addition to extended pain, pushed back surgeries leave more time for disease advancement. Certain cancers can advance to later stages in four to eight weeks, for instance. Even procedures considered low acuity, such as joint replacements or bariatric cases, will have material implications from delays through reduced activity, mobility and quality of life for patients. Delays in surgery have also been shown to result in higher rates of surgical site infections.
“I’d say it’s a bona fide mess right now,” Kenneth Kaufman, chair and founding partner of Kaufman Hall, told The Washington Post. “We seem to be back to square one. Omicron has significantly compounded staffing shortages in a very profound way.”
Hospitals hit pause on surgeries over the last several weeks as growing COVID-19 inpatient volumes were compounded by omicron sidelining healthcare professionals infected with the virus. Vaccinated healthcare professionals experienced mild breakthrough cases that temporarily took them out of the workforce.
Cleveland Clinic has extended its postponement of elective surgeries four times over the past month as thousands of employees were sidelined from COVID-19 infection. Hospitals in New York, Chicago, St. Louis, Washington and Virginia are among those that have either moved back surgeries or complied with government officials’ requests to do so in January.
Healthcare professionals have taken issue with the industry term “elective,” which does not describe the acuity of the medical condition or necessity of the procedure. Rather, the use of “elective” distinguishes these surgeries that are scheduled in advance from emergency surgeries, such as trauma cases.
University of Utah Hospital in Salt Lake Citypostponed about 20 percent of its surgeries when at least 500 clinical and nonclinical employees were out sick or isolating from COVID-19 at the start of the month.
“Around Christmastime and the week after Christmas, we didn’t have to reschedule any operations for a period of three weeks, until January 1. Then the wheels came off,” Robert E. Glasgow, MD, interim chair of the hospital’s surgery department, told The Washington Post.
On Jan. 14, the physicians at the hospital learned they could accommodate six additional surgery cases Jan. 18, leaving them in a mad dash to identify priority patients and determine who could present for surgery with less than four days’ notice.
“How can we find six cases that are most in need and are most able to come?” said Dr. Glasgow said.
HENRY KOTULA 