Category Archives: Hospital Industry

Is it time to take Physicians off the Hamster Wheel?

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https://mailchi.mp/bfba3731d0e6/the-weekly-gist-july-2-2021?e=d1e747d2d8

7 Smart Strategies for Paying Off Medical School Debt | Student Loan Hero

In theory, the idea of salaried compensation for employed physicians makes a lot of sense. For one thing, it’s blessedly simple, with the potential to remove the tensions that arise in shifting to value-based payment or implementing lower-cost (but lower-reimbursement) care models like telemedicine.

However, medical group leaders have long feared that productivity would tank if doctors were put on salary. (As a consulting colleague said recently, the switch to salary would cause a 20+ percent drop in productivity in the medical group, creating a challenge akin to keeping an airline profitable after removing a quarter of the seats on its planes). We’ve been expecting that more doctors might seek stable compensation models in the wake of the pandemic, and so weren’t entirely surprised when the question of moving to straight salary came up in three conversations over the past two weeks.
 
In all three cases, leaders are hoping to create more predictability, and to decrease the resources and effort needed to execute against a menu of complex plans. They believe that a move to salary is inevitable, and their questions have more to do with timing. 

Gauging when to make the move should be determined not by external market shifts, but by internal cultural and operational readiness. Are the systems in place to enable doctors to work at a high level of efficiency? And do we have the group collaboration needed to maintain high performance without paying doctors as if they are salesmen on commission?

Another wrinkle has popped up for groups who might be ready now: the past year has upended the benchmarks that groups might otherwise use to inform decisions on where to set salaries. Nevertheless, over time we expect more groups to move in this direction, with the hope of getting off the “hamster wheel” of compensation committee meetings and ever more exotic permutations of bonus plans, in search of a more stable model.

Biden administration begins to implement a ban on surprise bills

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Biden Faces Health Industry Fight Over New 'Surprise' Billing Ban

On Thursday, the Biden administration issued the first of what is expected to be a series of new regulations aimed at implementing the No Surprises Act, passed by Congress last year and signed into law by President Trump, which bans so-called “surprise billing” by out-of-network providers involved in a patient’s in-network hospital visit.

The interim final rule, which takes effect in 2022, prohibits surprise billing of patients covered by employer-sponsored and individual marketplace plans, requiring providers to give advance warning if out-of-network physicians will be part of a patient’s care, limiting the amount of patient cost-sharing for bills issued by those providers, and prohibiting balance billing of patients for fees in excess of in-network reimbursement amounts.

The rule also establishes a process for determining allowable rates for out-of-network care, involving comparison to prevailing statewide rates or the involvement of a neutral arbitrator, but falls short of specifying a baseline price for arbitrators to use in determining allowable charges. That methodology, along with other details, will be part of future rulemaking, which will be issued later this year.

Of note, the rule does not include a ban on surprise billing for ground ambulance services, which were excluded by Congress in the law’s final passage—even though more than half of all ambulance trips result in an out-of-network bill. Expect intense lobbying by industry interests to continue as the details of future rulemaking are worked out, as has been the case since before the law was passed.

While burdensome for patients, surprise billing has become a lucrative business model for some large, investor-owned specialist groups, who will surely look to minimize the law’s impact on their profits.

The Supreme Court lets site-neutral payment policies proceed

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https://mailchi.mp/bfba3731d0e6/the-weekly-gist-july-2-2021?e=d1e747d2d8

Senators urge CMS to reconsider proposal to expand site-neutral policies | AHA News

This week, the Supreme Court declined to hear an appeal challenging Medicare’s 2019 regulation calling for “site-neutral payment” for services provided by hospitals in outpatient settings, clearing the way for the rule’s implementation. The appeal was filed by the American Hospital Association (AHA), along with numerous hospitals and health systems, after a lower court ruling last year upheld the change to Medicare’s reimbursement policies.

The rule aims to level the playing field between independent providers and hospital-owned clinics by curtailing hospitals’ ability to charge higher “facility fees” for services provided in locations they own. Site-neutral payment has been a longstanding target of criticism by health economists and policymakers, who cite the pricing advantage as a driver of consolidation in the industry, which has tended to push the cost of care upward.

The AHA expressed disappointment in the Court’s decision not to hear the appeal, saying that the changes to payment policy “directly undercut the clear intent of Congress to protect them because of the many real and crucial differences between them and other sites of care.” The primary difference, of course, is hospitals’ need to fully allocate their costs across all the services they bill for, making care in lower-acuity settings more expensive than similar care delivered by practices that don’t have to subsidize inpatient hospitals and other costly assets.

Over the years that legitimate business need has turned into a deliberate business model—purchasing independent practices in order to take advantage of higher hospital pricing. As Medicare looks to manage Baby Boomer-driven cost growth, and employers and consumers grapple with rising health spending, expect increasingly rigorous efforts to push back against these kinds of pricing strategies.

California hospital beats suit over ER fee nondisclosure

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https://www.beckershospitalreview.com/legal-regulatory-issues/california-hospital-beats-suit-over-er-fee-nondisclosure.html?origin=CFOE&utm_source=CFOE&utm_medium=email&utm_content=newsletter&oly_enc_id=2893H2397267F7G
California moves end surprise ER bills after Vox's reporting - Vox

A California hospital was properly dismissed from a lawsuit alleging it violated state consumer protection laws by failing to disclose emergency room visit fees before treatment, a state appellate court ruled June 29. 

Joshua Yebba filed the lawsuit against AHMC Anaheim (Calif.) Regional Medical Center, alleging the hospital violated California’s Unfair Competition Law and Consumer Legal Remedies Act when it did not disclose a separate fee for an emergency room visit before treating him. Mr. Yebba claimed he would have gone to a different ER if he knew about the fee. He sued on behalf of himself and others who allegedly were charged the separate ER fee without knowing about it. 

The lawsuit centered on whether the hospital had a duty to disclose the ER fee to patients before treating them and whether the hospital violated the consumer protection laws by not disclosing them. 

The hospital argued that it fulfilled any duty to disclose the fee because it has a written or electronic copy of its chargemaster available. However, Mr. Yebba contended that Anaheim Regional had a duty to tell him personally while checking in or to at least post a sign about the fees in the ER. 

A lower court dismissed the case against the hospital on the grounds that Anaheim Regional had no duty to disclose the separate ER fee to Mr. Yebba before treating him and that the allegations didn’t violate the consumer protection acts.

The California Court of Appeals 4th District affirmed the dismissal, saying that California lawmakers have determined what pricing information hospitals must disclose to patients and when, and a court decision increasing the requirements “upsets the legislative balance between the consumers’ right to information and the hospitals’ burden of providing it.”

Read the full court opinion here. 

‘It’d be catastrophic’: Dallas-area hospitals could lose $1.1B annually without Medicaid waiver, healthcare group warns

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Original map. Location of hospitals in Dallas, TX. Source: North... | Download Scientific Diagram

Hospitals in the Dallas-Fort Worth region could collectively lose $1.1 billion in funding each year without a Medicaid waiver extension, a healthcare group warned, according to CBS Local.

The group, Texas Essential Healthcare Partnerships, represents 72 hospitals in the Dallas-Fort Worth region, including those operated by Dallas-based Tenet Healthcare and Houston-based Baylor Scott & White Health. 

In April, CMS rescinded approval for a Section 1115 waiver to extend reimbursement to Texas hospitals for uncompensated care through September 2030. President Joe Biden’s CMS said that under the previous administration, CMS and Texas failed to adhere to public comment period requirements in the approval process, so it should be rescinded.  

Don Lee, Texas Essential Healthcare Partnerships, told CBS he’s concerned about CMS’ decision to rescind the waiver next year and that hospitals could begin feeling the effects in just three months. 

“There’s about $330 million of very important mental healthcare funding for mental healthcare services for the poor that will be lost starting in September of this year,” Mr. Lee told CBS Local. 

Texas plans to resubmit its application to extend the 1115 waiver soon, according to the report. However, if the new application is not approved, Mr. Lee said that some hospitals in the North Texas region may be forced to close. 

“We believe it’d be catastrophic, not just for the hospitals, but for all Texans,” Mr. Lee told CBS Local. 

‘I only see the potential for massive financial loss’: Former Spectrum CFO doubts value of Beaumont merger

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I only see the potential for massive financial loss': Former Spectrum CFO doubts value of Beaumont merger

Michael Freed, the former CFO of Spectrum Health, said he was “stunned” when he heard that the Grand Rapids, Mich.-based system plans to pursue a merger with Southfield, Mich.-based Beaumont Health, for myriad reasons. 

In a June 24 open letter to Spectrum’s board of directors, Mr. Freed said during his tenure they discussed possible mergers routinely and that a Spectrum-Beaumont combination “brought nothing new with it” and wouldn’t enhance value. 

“The markets didn’t overlap, so there were no significant administrative savings opportunities. The ability of each hospital to grow wasn’t enhanced by adding the other to the ‘system,'” Mr. Freed wrote. “In short, I never saw how such a merger could improve health, enhance value or make care more affordable. I still don’t.”

Mr. Freed was Spectrum’s CFO from May 1995 to December 2013. During his tenure, he helped oversee the formation of Spectrum and a substantive period of growth for the Michigan system. Mr. Freed also served as CEO of Spectrum’s health plan, Priority Health, from May 2012 until he retired in January 2016.

In his letter, Mr. Freed outlined several reasons he was “stunned” by the pursuit of the merger that would create a health system with 22 hospitals, 305 outpatient centers and about $13 billion in operating revenue.

Mr. Freed wrote that the merger with Beaumont, which is based in Southfield, Mich., may not be in the best interest of West Michigan. He said the combination of the two systems raises questions about whether governance truly will remain in the region and with Spectrum, if financial transparency will continue and if Spectrum will continue to honor the consent decree it signed in 1997 establishing a set of operational guidelines. 

If the merger moves forward, “debt can be placed on the books of West Michigan while investments EARNED IN West Michigan could be spent in SE Michigan … and vice versa,” Mr. Freed wrote. “If this entity should someday merge with other out-of-state entities, West Michigan could find itself investing in healthcare in other states as well, rather than in its own health.”

Mr. Freed raised concerns over the agreement between Spectrum and Beaumont to create a 16-person board of directors, seven of whom would come from Spectrum and seven from Beaumont. The CEO would come from Spectrum, and one new board member will be appointed. 

“While this structure looks to favor Spectrum Health initially, it would only take the hiring of a board member more favorable to Beaumont Health and the replacement of the CEO (in favor of Beaumont Health) for Spectrum Health to find itself outvoted 9 to 7 on key issues,” Mr. Freed said.

Additionally, Mr. Freed noted that the merger has the potential for massive financial losses to West Michigan. In particular, Mr. Freed said losses would stem from the financial assets of Spectrum and Priority Health no longer residing in West Michigan. 

“I’ll admit, I don’t see any value in this merger,” Mr. Freed wrote. “I only see the potential for massive financial loss, both historically and an undetermined amount going forward, to the region that produced all of Spectrum Health.” 

Mr. Freed urged the Spectrum board to take a few steps before moving forward with the merger, including selling or divesting Priority Health. 

“When you sign the documents that will permanently change this region, your signature will forever hold you accountable for the repercussions,” Mr. Freed wrote. “Please sign carefully.” 

Spectrum Health told MiBiz it remains committed to the commitments in the 1997 consent agreement and that it “remains enthusiastic” about the merger.

“Spectrum Health is fully committed to fulfilling its consent decree obligations and will continue to uphold its tenets,” the health system said. “We remain confident that creating a new system not only meets our current obligations to our local communities but will also improve the health of individuals in West Michigan and throughout the state.”

Access the full letter here. 

More hospitals poised to require COVID-19 vaccines

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https://www.healthcaredive.com/news/more-hospitals-poised-to-require-covid-19-vaccines/602457/?utm_source=Sailthru&utm_medium=email&utm_campaign=Issue:%202021-06-28%20Healthcare%20Dive%20%5Bissue:35120%5D&utm_term=Healthcare%20Dive

It’s “a trickle that will become a torrent,” Ashish Jha, dean at Brown University’s School of Public Health, tweeted.

More hospitals are likely to require employees receive a COVID-19 vaccine, experts said, to further protect the sick and vulnerable patients who rely on them for care.

A Houston-area hospital captured headlines after taking a firm stance on requiring vaccines that prevent severe illness of the coronavirus, which has killed more than 600,000 in the U.S. and ravaged the economy.

Houston Methodist employees who refused the vaccine were either terminated or resigned. A judge earlier this month sided with the hospital and tossed out an employee lawsuit that was seeking to block the mandated inoculation. The ruling may give other hospitals the green light to require the jab, and as more facilities put a similar policy in place, others are likely to follow, experts said.

It’s “a trickle that will become a torrent,” Ashish Jha, professor and dean at Brown University’s School of Public Health, posted Thursday on Twitter.

3 large health systems in Massachusetts to require all workers to be vaccinated.

Given the critical need to protect vulnerable patients, its critical all hospitals do this.

Leading systems will do it soon.

Laggards will get there eventually.

Joining the growing tide of vaccine mandates are a variety of systems and hospitals, including Mass General Brigham in Boston, BJC Healthcare in St. Louis and Inova Health System in Virginia.

Some of the nation’s largest health systems have yet to mandate the shot, including Kaiser Permanente and CommonSpirit Health.

“Vaccination will only be required for Kaiser Permanente employees if a state or county where we operate mandates the vaccine for health care workers,” the company said in an email.

The American Hospital Association continues to hear that a growing number of its members are requiring the vaccine, with some exemptions. However, many member hospitals are waiting until the FDA grants full approval, a time when more safety and efficacy data will be made available.

“Getting vaccinated is especially critical for health care professionals because they work with patients with underlying health conditions whose immune systems may be compromised,” AHA, which has not taken on stance on the requirement, said in a statement.

The mandates raise ethical questions, some say, pointing to the profession’s promise to “do no harm.”

Arthur Caplan, head of medical ethics at New York University School of Medicine, said the codes of ethics that doctors and nurses says to put patients first, do no harm and protect the vulnerable.

“Of course they should be vaccinated,” he said. “If they don’t want to get vaccinated, I think they’re in the wrong profession.”

The Equal Employment Opportunity Commission said employment law does not prohibit employers from requiring the jab, essentially giving the green light to employers to put incentives and requirements in place for their workers. The EEOC is the federal agency tasked with ensuring that workplaces do not discriminate.

Some states are going against the tide and signing legislation that bars vaccine mandates, including Florida. The city of San Francisco will require hospital employees and workers in high-risk settings to get the vaccine. San Francisco, like other employers and universities, will require all city workers get inoculated.

The differing policy stances across the country creates additional hurdles for corporations with a large footprint.

S&P upgrades view on nonprofit health sector as COVID-19 cases drop

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https://www.healthcaredive.com/news/sp-upgrades-view-nonprofit-health-sector-covid-19-cases-drop/602325/?utm_source=Sailthru&utm_medium=email&utm_campaign=Issue:%202021-06-24%20Healthcare%20Dive%20%5Bissue:35062%5D&utm_term=Healthcare%20Dive

Dive Brief:

  • S&P Global Ratings on Wednesday upgraded its view on the nonprofit healthcare sector to stable. It had been at negative since March 2020, a view that was affirmed in January.
  • Analysts said the change results from coronavirus vaccination rates and decreasing COVID-19 cases as well as a drop in the unemployment rate that should reduce payer mix shakeup. They also pointed to generally healthy balance sheets across the sector.
  • Headwinds remain, most notably labor expenses as burnout among staff was heavily exacerbated by the pandemic. Increased salaries and benefit expenses will dampen margins going forward, according to the report.

Dive Insight:

The change is another sign for providers that their financial situation is on a rather swift recovery from the upheaval caused by the pandemic. Although some facilities, especially those that are smaller and in rural areas, are certainly still struggling, that was the case before COVID-19 as well.

Most nonprofit health systems reported first-quarter results that showed improved volumes and investment returns. Some are still sporting more than a year’s worth of cash on hand.

Many of them took advantage of federal coronavirus relief funds, most of which can now be used more flexibly. A few, like Kaiser Permanente, did fine without the aid and ended up returning it.

The S&P analysts warned, however, that potential COVID-19 outbreaks this fall would be a setback. That remains a concern with some parts of the country lagging in vaccination rates and the increasing prevalence of more contagious COVID-19 variants.

Other risks include the end of enhanced federal reimbursement and the return of the Medicare sequester cuts when the public health emergency ends, which is expected to be after the end of this year.

But the analysts said agile management teams should be able to combat these challenges.

“[T]o the extent that the pandemic has enabled faster decision making and allowed management teams to pivot and identify new opportunities for expense base restructuring and revenue enhancement, we believe these risks are manageable within our view of the stable sector view,” according to the report.

7 hospitals laying off workers

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RTI International furloughs roughly 1,200 employees across U.S. | WRAL TechWire

Many U.S. hospitals are turning to layoffs to cut costs as they recover from the financial hit of the COVID-19 pandemic. 

Here are seven hospitals or health systems that recently announced layoffs or job cuts:

1. Mishawaka, Ind.-based Franciscan Health will lay off 83 employees of its 100-year-old hospital in Hammond, Ind., according to a notice filed with the state. The layoff notice comes as the health system works to shrink the 226-bed Franciscan Health Hammond Hospital to an eight-bed acute care facility with an emergency department and primary care practice. The layoffs are slated to begin Aug. 21 and will be permanent, the health system said.

2. HealthAlliance of the Hudson Valley, a three-hospital system in the Westchester Medical Center Health Network, laid off an undisclosed number of workers June 14. Westchester Medical Center Health Network in Valhalla, N.Y., said it laid off HealthAlliance hospital employees in Kingston, N.Y., to eliminate redundancies as it begins to consolidate inpatient services to one location.

3. As part of a financial restructuring plan, Sacramento, Calif.-based Sutter Health will issue another round of layoffs this year. The health system said in early June it plans to lay off 400 employees. These newly announced layoffs are in addition to 277 information technology jobs that were cut April 2. Sutter said most of the new layoffs affect employees in administrative positions in benefits, human resources, data services and accounting. The layoff notice said many of these employees were working remotely or in the field. 

4. A little over a month after filing a notice to complete about 651 layoffs this year, Ascension Technologies, the IT subsidiary of St. Louis-based Ascension, eliminated 92 remote IT jobs in Indiana, according to a June 3 report. Most of the laid-off employees are based in Indianapolis and Evansville, Ind., the Indiana Department of Workforce Development said June 2

5. Lawrence (Mass.) General Hospital plans to lay off 56 employees and is warning of more cuts unless it receives government aid quickly, according to a May 25 report. The layoffs will affect employees working in administration and patient care. The layoffs affect about 2.5 percent of the 186-bed hospital’s workforce. Lawrence General attributed the layoffs to the COVID-19 pandemic weakening its financial profile. 

6. Boca Raton, Fla.-based Cancer Treatment Centers of America closed its hospital in Tulsa, Okla. About 400 employees will be affected by the closure. The hospital saw its last patient on May 27. 

7. Boca Raton, Fla.-based Cancer Treatment Centers of America is selling its hospital in Philadelphia and will lay off the facility’s 365 employees, according to a closure notice filed with the state. The cancer care network said it anticipates the layoffs in Philadelphia will begin after May 30.

Cartoon – Sign of the Time (Surgery)

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Cartoon – Surgical Success Today | HENRY KOTULA