Category Archives: Quality of Care

How cognitive biases impact healthcare decisions

Posted on by • Posted in Artificial Intelligence Generative, Availability Bias, ChatGPT, ChatGPT-4, Clinical Decision Support Systems, Clinical Diagnosis, Cognitive Bias, Confirmation Bias, Do No Harm, Framing Effect, Physician, Physician Diagnosis, Quality of Care, Self-Serving Bias, Subconscious Bias • Leave a comment

https://www.linkedin.com/pulse/how-cognitive-biases-impact-healthcare-decisions-robert-pearl-m-d–ti5qc/?trackingId=eQnZ0um3TKSzV0NYFyrKXw%3D%3D

Day one of the healthcare strategy course I teach in the Stanford Graduate School of Business begins with this question: “Who here receives excellent medical care?”

Most of the students raise their hands confidently. I look around the room at some of the most brilliant young minds in business, finance and investing—all of them accustomed to making quick yet informed decisions. They can calculate billion-dollar deals to the second decimal point in their heads. They pride themselves on being data driven and discerning.

Then I ask, “How do you know you receive excellent care?”

The hands slowly come down and room falls silent. In that moment, it’s clear these future business leaders have reached a conclusion without a shred of reliable data or evidence.

Not one of them knows how often their doctors make diagnostic or technical errors. They can’t say whether their health system’s rate of infection or medical error is high, average or low.

What’s happening is that they’re conflating service with clinical quality. They assume a doctor’s bedside manner correlates with excellent outcomes.

These often false assumptions are part of a multi-millennia-long relationship wherein patients are reluctant to ask doctors uncomfortable but important questions: “How many times have you performed this procedure over the past year and how many patients experienced complications?” “What’s the worst outcome a patient of yours had during and after surgery?”

The answers are objective predictors of clinical excellence. Without them, patients are likely to become a victim of the halo effect—a cognitive bias where positive traits in one area (like friendliness) are assumed to carry over to another (medical expertise).

This is just one example of the many subconscious biases that distort our perceptions and decision-making.

From the waiting room to the operating table, these biases impact both patients and healthcare professionals with negative consequences. Acknowledging these biases isn’t just an academic exercise. It’s a crucial step toward improving healthcare outcomes.

Here are four more cognitive errors that cause harm in healthcare today, along with my thoughts on what can be done to mitigate their effects:

Availability bias

You’ve probably heard of the “hot hand” in Vegas—a lucky streak at the craps table that draws big cheers from onlookers. But luck is an illusion, a product of our natural tendency to see patterns where none exist. Nothing about the dice changes based on the last throw or the individual shaking them.

This mental error, first described as “availability bias” by psychologists Amos Tversky and Daniel Kahneman, was part of groundbreaking research in the 1970s and ‘80s in the field of behavioral economics and cognitive psychology. The duo challenged the prevailing assumption that humans make rational choices.

Availability bias, despite being identified nearly 50 years ago, still plagues human decision making today, even in what should be the most scientific of places: the doctor’s office.

Physicians frequently recommend a treatment plan based on the last patient they saw, rather than considering the overall probability that it will work. If a medication has a 10% complication rate, it means that 1 in 10 people will experience an adverse event. Yet, if a doctor’s most recent patient had a negative reaction, the physician is less likely to prescribe that medication to the next patient, even when it is the best option, statistically.

Confirmation bias

Have you ever had a “gut feeling” and stuck with it, even when confronted with evidence it was wrong? That’s confirmation bias. It skews our perceptions and interpretations, leading us to embrace information that aligns with our initial beliefs—and causing us to discount all indications to the contrary.

This tendency is heightened in a medical system where physicians face intense time pressures. Studies indicate that doctors, on average, interrupt patients within the first 11 seconds of being asked “What brings you here today?” With scant information to go on, doctors quickly form a hypothesis, using additional questions, diagnostic testing and medical-record information to support their first impression.

Doctors are well trained, and their assumptions prove more accurate than incorrect overall. Nevertheless, hasty decisions can be dangerous. Each year in the United States, an estimated 371,000 patients die from misdiagnoses.

Patients aren’t immune to confirmation bias, either. People with a serious medical problem commonly seek a benign explanation and find evidence to justify it. When this happens, heart attacks are dismissed as indigestion, leading to delays in diagnosis and treatment.

Framing effect

In 1981, Tversky and Kahneman asked subjects to help the nation prepare for a hypothetical viral outbreak. They explained that if the disease was left untreated, it would kill 600 people. Participants in one group were told that an available treatment, although risky, would save 200 lives. The other group was told that, despite the treatment, 400 people would die. Although both descriptions lead to the same outcome—200 people surviving and 400 dying—the first group favored the treatment, whereas the second group largely opposed it.

The study illustrates how differently people can react to identical scenarios based on how the information is framed. Researchers have discovered that the human mind magnifies and experiences loss far more powerfully than positive gains. So, patients will consent to a chemotherapy regiment that has a 20% chance of cure but decline the same treatment when told it has 80% likelihood of failure.

Self-serving bias

The best parts about being a doctor are saving and improving lives. But there are other perks, as well.

Pharmaceutical and medical-device companies aggressively reward physicians who prescribe and recommend their products. Whether it’s a sponsored dinner at a Michelin restaurant or even a pizza delivered to the office staff, the intention of the reward is always the same: to sway the decisions of doctors.

And yet, physicians swear that no meal or gift will influence their prescribing habits. And they believe it because of “self-serving bias.”

In the end, it’s patients who pay the price. Rather than receiving a generic prescription for a fraction of the cost, patients end up paying more for a brand-name drug because their doctor—at a subconscious level—doesn’t want to lose out on the perks.

Thanks to the “Sunshine Act,” patients can check sites like ProPublica’s Dollars for Docs to find out whether their healthcare professional is receiving drug- or device-company money (and how much).

Reducing subconscious bias

These cognitive biases may not be the reason U.S. life expectancy has stagnated for the past 20 years, but they stand in the way of positive change. And they contribute to the medical errors that harm patients.

A study published this month in JAMA Internal Medicine found that 1 in 4 hospital patients who either died or were transferred to the ICU had been affected by a diagnostic mistake. Knowing this, you might think cognitive biases would be a leading subject at annual medical conferences and a topic of grave concern among healthcare professionals. You’d be wrong. Inside the culture of medicine, these failures are commonly ignored.

The recent story of an economics professor offers one possible solution. Upon experiencing abdominal pain, he went to a highly respected university hospital. After laboratory testing and observation, his attending doctor concluded the problem wasn’t serious—a gallstone at worst. He told the patient to go home and return for outpatient workup.

The professor wasn’t convinced. Fearing that the medical problem was severe, the professor logged onto ChatGPT (a generative AI technology) and entered his symptoms. The application concluded that there was a 40% chance of a ruptured appendix. The doctor reluctantly ordered an MRI, which confirmed ChatGPT’s diagnosis.

Future generations of generative AI, pretrained with data from people’s electronic health records and fed with information about cognitive biases, will be able to spot these types of errors when they occur.

Deviation from standard practice will result in alerts, bringing cognitive errors to consciousness, thus reducing the likelihood of misdiagnosis and medical error. Rather than resisting this kind of objective second opinion, I hope clinicians will embrace it. The opportunity to prevent harm would constitute a major advance in medical care.

Don’t Let Your Hospital Be Boeing

Posted on by • Posted in Communication, Culture, Key Metrics, Key Performance Indicators, Leadership Culture, Leadership Listens, Leadership Rounding, Leadership Trust, Lean Process Improvement, Quality Control, Quality of Care, Reliable, Training • Leave a comment
https://www.kaufmanhall.com/insights/thoughts-ken-kaufman/dont-let-your-hospital-be-boeing?utm_source=referral&utm_campaign=ken-weekly-blog&utm_medium=em&utm_term=240214&mkt_tok=NjU0LUNOWS0yMjQAAAGRRxweCXw_qTYKcyjKSM6a_wyfaH9MRg5vU-yYT8C7b3gkFvdjkz0pAkEcIGSxWsV22lfoHwBcoX8Mw9LZ7y_WKR0c4E9WhV0LJfdlq8_XyLEh

If you haven’t noticed (but I am sure you have) American business can be very unsettling from time to time, and occasionally the bigger the business, the more unsettling it gets. Exhibit A right now for this observation is, of course, the Boeing Company.

For years Boeing was an iconic, high reliability company; a worldwide leader in the growth of airplane transportation. As Bill Saporito wrote in the January 23 New York Times, Boeings’ airplanes were industry-changing, including the 707 jet in 1957, the 747 introduced in 1970, and perhaps the most successful commercial plane in aviation history, the 737.

But when things go bad, they can, indeed, go very bad. The newly designed 737 MAX crashed twice, once in 2018 and again in 2019, with a loss of life of 346 people. Now this year, a door plug fell off the Alaska Airlines Boeing 737 Max 9 at 16,000 feet and subsequent investigation revealed the possibility of missing bolts. All 737 MAX 9s were grounded while a special investigation was convened. Manufacturing airplanes is a special enterprise; lives are at stake. Airlines and the flying public take these Boeing problems very seriously.

What went wrong at Boeing?

Everybody has an opinion. One popular interpretation goes all the way back to Boeing’s merger in 1997 with McDonell Douglas. Recent articles suggest that prior to 1997 Boeing had a very dominant “engineering” culture. After the McDonell Douglas merger, the Boeing culture took a more “business” turn. That is the speculation anyway.

What strikes me here is the similarity between Boeing and the American hospital industry. Boeing “manufactures” planes and hospitals “manufacture” healthcare.

Neither industry can make mistakes; manufacturing errors in both cases change lives and cause real personal and societal pain. For both Boeing and hospitals, high reliability and error-free execution is the only acceptable business model.

Why is this analogy to Boeing apt and important?

Because American healthcare is likely the most intricate enterprise humanity has ever engineered. Therapeutic interventions are increasingly effective but demand pinpoint diagnoses and precision treatment. All of this is happening within profound technological complexity. The opportunity for regrettable manufacturing error—in fact the likelihood of such error—is so significant that no American hospital can possibly take for granted that high reliability processes and culture are properly in place and remain in place.

So what can hospitals do to keep from being Boeing?

In all candor, this question is over my paygrade, so for an experienced and nuanced answer, I turned to Allan Frankel, MD. Dr. Frankel is an anesthesiologist and former hospital executive who founded Safe and Reliable Healthcare after evaluating one too many disasters in healthcare delivery. He is currently an Executive Principal at Vizient Inc. Dr. Frankel offered the following high reliability tutorial:

  1. High reliability manufacturing is directly dependent on the culture of the organization in question. Everyday excellence which leads to high reliability is dependent on the collective mindset and social norms of your workforce. Any high reliability workforce must trust its leadership and believe that the workforce values and leadership values are aligned. Further, a high reliability culture gives the workforce a sense of purpose and the opportunity to be their best professional selves on the job.
  2. In the workplace, bi-directional communication is essential. Leaders and managers must round, see the actual work firsthand, learn what it is like to perform the work, and talk to individuals about the challenges of doing the work. Under best practices senior leaders should round 10% to 20% of their time. Line managers should round 80% to 90% of their time.
  3. Workers, on the other hand, must have a sense of voice and agency. Voice means that workers are able to speak up about their concerns and ideas. Agency means that when workers do speak up, they see their ideas and concerns influence their work environment for the better.
  4. Voice and agency require that workers feel safe in the high reliability process and that when identifying defects in the manufacturing process, they will be treated fairly. And importantly, that having the courage to speak up is an organizational attribute that is perceived as worthy. Such worthiness is described by discrete concepts including “psychological safety,” just culture,” and “respect.” Each of these concepts is definable and requires focused and ongoing training.
  5. Concepts 3 and 4 require close attention and care and feeding. Functionally, this happens by robust leader rounding, robust managerial huddles, and timely feedback regarding manufacturing concerns and weaknesses. These activities need to be structural and must be built into a system of operations—such systems are often referred to as “standard work.” These changes plus the right frame of mind functionally drive improvement and change. Dr. Frankel noted “it’s not complicated, but as the Boeing example illustrates, the high reliability philosophy must be perpetually nourished.”
  6. Once all the above is in place, there needs to be an effector arm. Process improvement skills are required to take ideas and concerns and test and implement them. Quality personnel must check on the changes as they are being made and audit operations. Dr. Frankel adds that this part of the high reliability journey is very often under-resourced in healthcare organizations, with the result that the overall process feels less effective so the activities stop occurring.
  7. Training and skills are paramount. Skills come from training and reading. You should be thinking here about the “10,000 hours concept.” Worthy attitudes must be defined by your organization and then uniformly expected of all staff. Finally, behaviors can be structured, expectations set, and measures and metrics identified.

As you can see from the suggested activities, the foundations of high reliability are not rocket science. They require the right frame of mind, attention to detail, and clear accountability of all involved. No hospital should let that metaphorical 737 MAX 9 door plug fall off at 16,000 feet. It was, without question, a terrifying manufacturing moment.

The Three In-bound Truth Bombs set to Explode in U.S. Healthcare

Posted on by • Posted in ACA, Administrative Burden, Affordability, Health Insurance Coverage Adequacy, Health System, Healthcare Reform, High Deductible Health Plans, Hospital, Hospital Industry, Medicare Advantage, Outcomes, Pharmaceutical Industry, Primary Care, Quality of Care, Regulation, Tax Exempt Status, Truth, Truth Unvarnished, Underinsured, Uninsured • Leave a comment
The Three In-bound Truth Bombs set to Explode in U.S. Healthcare

In Sunday’s Axios’ AM, Mike Allen observed “Republicans know immigration alone could sink Biden. So, Trump and House Republicans will kill anything, even if it meets or exceeds their wishes. Biden knows immigration alone could sink him. So he’s willing to accept what he once considered unacceptable — to save himself.”

Mike called this a “truth Bomb” and he’s probably right: the polarizing issue of immigration is tantamount to a bomb falling on the political system forcing well-entrenched factions to re-think and alter their strategies.

In 2024, in U.S. healthcare, three truth bombs are in-bound. They’re the culmination of shifts in the U.S.’ economic, demographic, social and political environment and fueled by accelerants in social media and Big Data.

Truth bomb: The regulatory protections that have buoyed the industry’s growth are no longer secure. 

Despite years of effectively lobbying for protections and money, the industry’s major trade groups face increasingly hostile audiences in city hall, state houses and the U.S. Congress.

The focus of these: the business practices that regulators think protect the status quo at the public’s expense. Example: while the U.S. House spent last week in their districts, Senate Committees held high profile hearings about Medicare Advantage marketing tactics (Finance Committee), consumer protections in assisted living (Special Committee on Aging), drug addiction and the opioid misuse (Banking) and drug pricing (HELP). In states, legislators are rationalizing budgets for Medicaid and public health against education, crime and cybersecurity and lifting scope of practice constraints that limit access.

Drug makers face challenges to patents (“march in rights”) and state-imposed price controls. The FTC and DOJ are challenging hospital consolidation they think potentially harmful to consumer choice and so. Regulators and lawmakers are less receptive to sector-specific wish lists and more supportive of populist-popular rules that advance transparency, disable business relationships that limit consumer choices and cede more control to individuals. Given that the industry is built on a business-to-business (B2B) chassis, preparing for a business to consumer (B2C) time bomb will be uncomfortable for most.

Truth bomb: Affordability in U.S. is not its priority.

The Patient Protection and Affordability Act 2010 advanced the notion that annual healthcare spending growth should not exceed more than 1% of the annual GDP.  It also advanced the premise that spending should not exceed 9.5% of household adjusted gross income (AGI) and associated affordability with access to insurance coverage offering subsidies and Medicaid expansion incentives to achieve near-universal coverage. In 2024, that percentage is 8.39%.

Like many elements of the ACA, these constructs fell short: coverage became its focus; affordability secondary.

The ranks of the uninsured shrank to 9% even as annual aggregate spending increased more than 4%/year. But employers and privately insured individuals saw their costs increase at a double-digit pace: in the process, 41% of the U.S. population now have unpaid medical debt: 45% of these have income above $90,000 and 61% have health insurance coverage. As it turns out, having insurance is no panacea for affordability: premiums increase just as hospital, drug and other costs increase and many lower- and middle-income consumers opt for high-deductible plans that expose them to financial insecurity. While lowering spending through value-based purchasing and alternative payments have shown promise, medical inflation in the healthcare supply chain, unrestricted pricing in many sectors, the influx of private equity investing seeking profit maximization for their GPs, and dependence on high-deductible insurance coverage have negated affordability gains for consumers and increasingly employers. Benign neglect for affordability is seemingly hardwired in the system psyche, more aligned with soundbites than substance.

Truth bomb: The effectiveness of the system is overblown.

Numerous peer reviewed studies have quantified clinical and administrative flaws in the system.  For instance, a recent peer reviewed analysis in the British Medical Journal concluded “An estimated 795 000 Americans become permanently disabled or die annually across care settings because dangerous diseases are misdiagnosed. Just 15 diseases account for about 50.7% of all serious harms, so the problem may be more tractable than previously imagined.”

The inadequacy of personnel and funding in primary and preventive health services is well-documented as the administrative burden of the system—almost 20% of its spending.  Satisfaction is low. Outcomes are impressive for hard-to-diagnose and treat conditions but modest at best for routine care. It’s easier to talk about value than define and measure it in our system: that allows everyone to declare their value propositions without challenge.

Truth bombs are falling in U.S. healthcare. They’re well-documented and financed. They take no prisoners and exact mass casualties.

Most healthcare organizations default to comfortable defenses. That’s not enough. Cyberwarfare, precision-guided drones and dirty bombs require a modernized defense. Lacking that, the system will be a commoditized public utility for most in 15 years.

PS: Last week’s report, “The Holy War between Hospitals and Insurers…” (The Keckley Report – Paul Keckley) prompted understandable frustration from hospitals that believe insurers do not serve the public good at a level commensurate with the advantages they enjoy in the industry. However, justified, pushback by hospitals against insurers should be framed in the longer-term context of the role and scope of services each should play in the system long-term. There are good people in both sectors attempting to serve the public good. It’s not about bad people; it’s about a flawed system.

JPM 2024 just wrapped. Here are the key insights

Posted on by • Posted in Artificial Intelligence Generative, Cost Management, Cost Reduction, Denial, Denial Management, Denial Rates, Digital Health, Disruption, Financial Distress, Financial Instability, Financial Performance, Financial Pressure, Financial Strength, Financial Transparency, Financial Viability, Financially Distressed, Health System, Hospital, Hospital Independence, Labor Spend Management, Medicare Advantage, Operating Margin, Operating Margin Drivers, Operating Metrics, Pharmacy Benefits Management, Quality Measures, Quality of Care, Workforce Retention, Workforce Shortages • Leave a comment

https://www.advisory.com/daily-briefing/2024/01/23/jpm-takeaways-ec#accordion-718cb981ab-item-4ec6d1b6a3

Earlier this month, leaders from more than 400 organizations descended on San Francisco for J.P. Morgan‘s 42nd annual healthcare conference to discuss some of the biggest issues in healthcare today. Here’s how Advisory Board experts are thinking about Modern Healthcare’s 10 biggest takeaways — and our top resources for each insight.

How we’re thinking about the top 10 takeaways from JPM’s annual healthcare conference 

Following the conference, Modern Healthcare  provided a breakdown of the top-of-mind issues attendees discussed.  

Here’s how our experts are thinking about the top 10 takeaways from the conference — and the resources they recommend for each insight.  

1. Ambulatory care provides a growth opportunity for some health systems

By Elizabeth Orr, Vidal Seegobin, and Paul Trigonoplos

At the conference, many health system leaders said they are evaluating growth opportunities for outpatient services. 

However, results from our Strategic Planner’s Survey suggest only the biggest systems are investing in building new ambulatory facilities. That data, alongside the high cost of borrowing and the trifurcation of credit that Fitch is predicting, suggests that only a select group of health systems are currently poised to leverage ambulatory care as a growth opportunity.  

Systems with limited capital will be well served by considering other ways to reach patients outside the hospital through virtual care, a better digital front door, and partnerships. The efficiency of outpatient operations and how they connect through the care continuum will affect the ROI on ambulatory investments. Buying or building ambulatory facilities does not guarantee dramatic revenue growth, and gaining ambulatory market share does not always yield improved margins.

While physician groups, together with management service organizations, are very good at optimizing care environments to generate margins (and thereby profit), most health systems use ambulatory surgery center development as a defensive market share tactic to keep patients within their system.  

This approach leaves margins on the table and doesn’t solve the growth problem in the long term. Each of these ambulatory investments would do well to be evaluated on both their individual profitability and share of wallet. 

On January 24 and 25, Advisory Board will convene experts from across the healthcare ecosystem to inventory the predominant growth strategies pursued by major players, explore considerations for specialty care and ambulatory network development, understand volume and site-of-care shifts, and more. Register here to join us for the Redefining Growth Virtual Summit.  

Also, check out our resources to help you plan for shifts in patient utilization:  

2. Rebounding patient volumes further strain capacity

By Jordan Peterson, Eliza Dailey, and Allyson Paiewonsky 

Many health system leaders noted that both inpatient and outpatient volumes have surpassed pre-pandemic levels, placing further strain on workforces.  

The rebound in patient volumes, coupled with an overstretched workforce, underscores the need to invest in technology to extend clinician reach, while at the same time doubling down on operational efficiency to help with things like patient access and scheduling. 

For leaders looking to leverage technology and boost operational efficiency, we have a number of resources that can help:  

3. Health systems aren’t specific on AI strategies

By Paul Trigonoplos and John League

According to Modern Healthcare, nearly all health systems discussed artificial intelligence (AI) at the conference, but few offered detailed implementation plans and expectations.

Over the past year, a big part of the work for Advisory Board’s digital health and health systems research teams has been to help members reframe the fear of missing out (FOMO) that many care delivery organizations have about AI.  

We think AI can and will solve problems in healthcare. Every organization should at least be observing AI innovations. But we don’t believe that “the lack of detail on healthcare AI applications may signal that health systems aren’t ready to embrace the relatively untested and unregulated technology,” as Modern Healthcare reported. 

The real challenge for many care delivery organizations is dealing with the pace of change — not readiness to embrace or accept it. They aren’t used to having to react to anything as fast-moving as AI’s recent evolution. If their focus for now is on low-hanging fruit, that’s completely understandable. It’s also much more important for these organizations to spend time now linking AI to their strategic goals and building out their governance structures than it is to be first in line with new applications.  

Check out our top resources for health systems working to implement AI: 

4. Digital health companies tout AI capabilities

By Ty Aderhold and John League

Digital health companies like Teladoc, R1 RCM, Veradigm, and Talkspace all spoke out about their use of generative AI. 

This does not surprise us at all. In fact, we would be more surprised if digital health companies were not touting their AI capabilities. Generative AI’s flexibility and ease of use make it an accessible addition to nearly any technology solution.  

However, that alone does not necessarily make the solution more valuable or useful. In fact, many organizations would do well to consider how they want to apply new AI solutions and compare those solutions to the ones that they would have used in October 2022 — before ChatGPT’s newest incarnation was unveiled. It may be that other forms of AI, predictive analytics, or robotic process automation are as effective at a better cost.  

Again, we believe that AI can and will solve problems in healthcare. We just don’t think it will solve every problem in healthcare, or that every solution benefits from its inclusion.  

Check out our top resources on generative AI: 

5. Health systems speak out on denials

By Mallory Kirby

During the conference, providers criticized insurers for the rate of denials, Modern Healthcare reports. 

Denials — along with other utilization management techniques like prior authorization — continue to build tension between payers and providers, with payers emphasizing their importance for ensuring cost effective, appropriate care and providers overwhelmed by both the administrative burden and the impact of denials on their finances. 

  Many health plans have announced major moves to reduce prior authorizations and CMS recently announced plans to move forward with regulations to streamline the prior authorization process. However, these efforts haven’t significantly impacted providers yet.  

In fact, most providers report no decrease in denials or overall administrative burden. A new report found that claims denials increased by 11.99% in the first three quarters of 2023, following similar double digit increases in 2021 and 2022. 

  Our team is actively researching the root cause of this discrepancy and reasons for the noted increase in denials. Stay tuned for more on improving denials performance — and the broader payer-provider relationship — in upcoming 2024 Advisory Board research. 

For now, check out this case study to see how Baptist Health achieved a 0.65% denial write-off rate.  

6. Insurers are prioritizing Star Ratings and risk adjustment changes

By Mallory Kirby

Various insurers and providers spoke about “the fallout from star ratings and risk adjustment changes.”

2023 presented organizations focused on MA with significant headwinds. While many insurers prioritized MA growth in recent years, leaders have increased their emphasis on quality and operational excellence to ensure financial sustainability.

  With an eye on these headwinds, it makes sense that insurers are upping their game to manage Star Ratings and risk adjustment. While MA growth felt like the priority in years past, this focus on operational excellence to ensure financial sustainability has become a priority.   

We’ve already seen litigation from health plans contesting the regulatory changes that impact the bottom line for many MA plans. But with more changes on the horizon — including the introduction of the Health Equity Index as a reward factor for Stars and phasing in of the new Risk Adjustment Data Validation model — plans must prioritize long-term sustainability.  

Check out our latest MA research for strategies on MA coding accuracy and Star Ratings:  

7. PBMs brace for policy changes

By Chloe Bakst and Rachael Peroutky 

Pharmacy benefit manager (PBM) leaders discussed the ways they are preparing for potential congressional action, including “updating their pricing models and diversifying their revenue streams.”

Healthcare leaders should be prepared for Congress to move forward with PBM regulation in 2024. A final bill will likely include federal reporting requirements, spread pricing bans, and preferred pricing restrictions for PBMs with their own specialty pharmacy. In the short term, these regulations will likely apply to Medicare and Medicaid population benefits only, and not the commercial market. 

Congress isn’t the only entity calling for change. Several states passed bills in the last year targeting PBM transparency and pricing structures. The Federal Trade Commission‘s ongoing investigation into select PBMs looks at some of the same practices Congress aims to regulate. PBM commercial clients are also applying pressure. In 2023, Blue Cross Blue Shield of California‘s (BSC) decided to outsource tasks historically performed by their PBM partner. A statement from BSC indicated the change was in part due to a desire for less complexity and more transparency. 

Here’s what this means for PBMs: 

Transparency is a must

The level of scrutiny on transparency will force the hand of PBMs. They will have to comply with federal and state policy change and likely give something to their commercial partners to stay competitive. We’re already seeing this unfold across some of the largest PBMs. Recently, CVS Caremarkand Express Scripts launched transparent reimbursement and pricing models for participating in-network pharmacies and plan sponsors. 

While transparency requirements will be a headache for larger PBMs, they might be a real threat to smaller companies. Some small PBMs highlight transparency as their main value add. As the larger PBMs focus more on transparency, smaller PBMs who rely on transparent offerings to differentiate themselves in a crowded market may lose their main competitive edge. 

PBMs will have to try new strategies to boost revenue

PBM practice of guiding prescriptions to their own specialty pharmacy or those providing more competitive pricing is a key strategy for revenue. Stricter regulations on spread pricing and patient steerage will prompt PBMs to look for additional revenue levers.   

PBMs are already getting started — with Express Scripts reporting they will cut reimbursement for wholesale brand name drugs by about 10% in 2024. Other PBMs are trying to diversify their business opportunities. For example, CVS Caremark’s has offered a new TrueCost model to their clients for an additional fee. The model determines drug prices based on the net cost of drugs and clearly defined fee structures. We’re also watching growing interest in cross-benefit utilization management programs for specialty drugs.  These offerings look across both medical and pharmacy benefits to ensure that the most cost-effective drug is prescribed for patients. 

Check out some of our top resources on PBMs:  

To learn more about some of the recent industry disruptions, check out:   

8. Healthcare disruptors forge on

 By John League

At the conference, retailers such as CVS, Walgreens, and Amazon doubled down on their healthcare services strategies.

Typically, disruptors do not get into care delivery because they think it will be easy. Disruptors get into care delivery because they look at what is currently available and it looks so hard — hard to access, hard to understand, and hard to pay for.  

Many established players still view so-called disruptors as problematic, but we believe that most tech companies that move into healthcare are doing what they usually do — they look at incumbent approaches that make it hard for customers and stakeholders to access, understand, and pay for care, and see opportunities to use technology and innovative business models in an attempt to target these pain points.

CVS, Walgreens, and Amazon are pursuing strategies that are intended to make it more convenient for specific populations to get care. If those efforts aren’t clearly profitable, that does not mean that they will fail or that they won’t pressure legacy players to make changes to their own strategies. Other organizations don’t have to copy these disruptors (which is good because most can’t), but they must acknowledge why patient-consumers are attracted to these offerings.  

For more information on how disruptors are impacting healthcare, check out these resources:  

9. Financial pressures remain for many health systems

By Vidal Seegobin and Marisa Nives

Health systems are recovering from the worst financial year in recent history. While most large health systems presenting at the conference saw their finances improve in 2023, labor challenges and reimbursement pressures remain.  

We would be remiss to say that hospitals aren’t working hard to improve their finances. In fact, operating margins in November 2023 broke 2%. But margins below 3% remain a challenge for long-term financial sustainability.  

One of the more concerning trends is that margin growth is not tracking with a large rebound in volumes. There are number of culprits: elevated cost structures, increased patient complexity, and a reimbursement structure shifting towards government payers.  

For many systems, this means they need to return to mastering the basics: Managing costs, workforce retention, and improving quality of care. While these efforts will help bridge the margin gap, the decoupling of volumes and margins means that growth for health systems can’t center on simply getting bigger to expand volumes.

Maximizing efficiency, improving access, and bending the cost curve will be the main pillars for growth and sustainability in 2024.  

 To learn more about what health system strategists are prioritizing in 2024, read our recent survey findings.  

Also, check out our resources on external partnerships and cost-saving strategies:  

10. MA utilization is still high

By Max Hakanson and Mallory Kirby  

During the conference, MA insurers reported seeing a spike in utilization driven by increased doctor’s visits and elective surgeries.  

These increased medical expenses are putting more pressure on MA insurers’ margins, which are already facing headwinds due to CMS changes in MA risk-adjustment and Star Ratings calculations. 

However, this increased utilization isn’t all bad news for insurers. Part of the increased utilization among seniors can be attributed to more preventive care, such as an uptick in RSV vaccinations.  

In UnitedHealth Group‘s* Q4 earnings call, CFO John Rex noted that, “Interest in getting the shot, especially among the senior population, got some people into the doctor’s office when they hadn’t visited in a while,” which led to primary care physicians addressing other care needs. As seniors are referred to specialty care to address these needs, plans need to have strategies in place to better manage their specialist spend.   

To learn how organizations are bringing better value to specialist care in MA, check out our market insight on three strategies to align specialists to value in MA. (Kacik et al., Modern Healthcare, 1/12)

*Advisory Board is a subsidiary of UnitedHealth Group. All Advisory Board research, expert perspectives, and recommendations remain independent. 

Former Kaiser nurse awarded $41M in retaliation lawsuit

Posted on by • Posted in Health System, Hospital, Hospital Industry, Kaiser Permanente, Lawsuit, Lawsuit Retaliation, Nurse Registered (RN), Nurses, Patient Safety, Quality, Quality of Care • Leave a comment
https://www.beckershospitalreview.com/nursing/former-kaiser-nurse-awarded-41m-in-retaliation-lawsuit.html?origin=PayerE&utm_source=PayerE&utm_medium=email&utm_content=newsletter&oly_enc_id=2893H2397267F7G

A Los Angeles jury awarded $41.49 million to a former nurse who said Kaiser Permanente’s hospitals and health plan retaliated against and eventually terminated her for raising issues with patient safety and care quality, MyNewsLA reported Dec. 12.

The former nurse, Maria Gatchalian, was awarded $11.49 million in compensatory damages, including $9 million for emotional distress, and $30 million in punitive damages.

“We stand by her termination and are surprised and disappointed in the verdict,” Murtaza Sanwari, senior vice president and area manager for Kaiser Permanente Woodland Hills/West Ventura County, told Becker’s in a statement. “Kaiser Permanente plans to appeal this decision and will maintain our high standards in protecting the health and safety of all our patients.” 

Before her termination in 2019, Ms. Gatchalian had worked at the Kaiser Permanente Woodland Hills Medical Center since 1989, first as a registered nurse in the neonatal intensive care unit and later as a charge nurse in that unit.

According to MyNewsLA, Ms. Gatchalian said she had repeatedly raised concerns with Kaiser management about patient safety and care quality related to alleged understaffing and was discouraged from submitting formal complaints. Oakland, Calif.-based Kaiser argued in court that Ms. Gatchalian admitted she had placed her bare feet on equipment in the NICU, and the organization made the decision to terminate her following her conduct.

“We work hard to make Kaiser Permanente a great place to work and a great place to receive care,” Mr. Sanwari said. “The allegations in this lawsuit are at odds with the facts we showed in the courtroom.” 

“To be clear, this charge nurse’s job was to be a leader for other nurses, ensure the standards of care were followed and to protect the neonatal babies entrusted to our care. She was terminated in 2019 following an incident where she was found sitting in a recliner in the neonatal intensive care unit, on her personal phone and resting her bare feet on an isolette with a neonatal infant inside. Neonatal intensive care units are critical care units designed for critically ill babies most often born prematurely and very susceptible to infections.

The isolette, where this nurse placed her bare feet, is a protective environment designed to shield the infant from infection causing germs. Placing her bare feet on the isolette may have created risk to the infant which could have been life threatening. Her actions were egregious and in violation of our infection control policies and standards.”

FDA approves latest weight-loss drug while AMA endorses coverage for obesity treatments

Posted on by • Posted in American Medical Association (AMA), Food and Drug Administration (FDA), Pharmaceutical Industry, Quality of Care, Quality of Life, Return on Investment, Wegovy, Weight Loss Drugs, Zepbound • Leave a comment

https://mailchi.mp/169732fa4667/the-weekly-gist-november-17-2023?e=d1e747d2d8

Last week, the Food and Drug Administration (FDA) announced the approval of Eli Lilly’s drug tirzepatide for treating obesity. The drug, which will be sold under the name Zepbound for obesity, is already branded as Mounjaro for diabetes treatment. 

While Novo Nordisk’s blockbuster semaglutide drug (sold as Wegovy for obesity and Ozempic for diabetes) works only as a GLP-1 agonist, tirzepatide also targets a second receptor and has been shown to elicit greater weight loss.

Spurred by trial results demonstrating significant health benefits beyond weight loss tied to these drugs, the American Medical Association House of Delegates voted this week to adopt a policy advocating for insurance coverage of GLP-1-based obesity treatments, affirming that it regards obesity as a disease, and that patients left untreated for the condition are at greater risk for serious health consequences.

To date, most insurers and self-funded employers have resisted covering weight loss drugs due to their prices: Zepbound has a list price of $1,060 per month, while Wegovy is priced at around $1,300 per month.

The Gist: We have entered a new era in treating obesity. 

Even with payers and employers dragging their feet over coverage decisions, and Medicare remaining prohibited from covering weight-loss drugs by law, consumer demand for the drugs has been strong enough to outpace supply. Zepbound’s approval will hopefully both improve availability and exert downward pricing pressure. 

While these drugs will undoubtedly contribute to higher healthcare spending in the short term, the long-term benefits of significant weight loss, combined with cardiovascular risk reduction, could lower healthcare costs over the patient’s lifespan—although the payer “holding the bag” for the cost today may not see the return, given that as many as 20 percent of individuals with commercial insurance switch carriers every year. 

The ACA’s Promise of Free Preventive Health Care Faces Ongoing Legal Challenges

Posted on by • Posted in ACA, Dept of Health and Human Services (HHS), District Court, District Court of Appeals, Health Policy, Lawsuit, Medicaid, Preventable Disease, Preventative Care, Prevention, Preventive Screening, Public Health, Quality of Care, Supreme Court, United States Preventive Services Task Force (USPSTF) • Leave a comment
https://www.commonwealthfund.org/blog/2023/acas-promise-free-preventive-health-care-faces-ongoing-legal-challenges?utm_campaign=Achieving%20Universal%20Coverage&utm_medium=email&_hsmi=279218032&_hsenc=p2ANqtz-9zDeEtOawTu_XlAtH44MhtF0pskow9Np3hYpbHYjISSFzah0E6zBTL84n3AeOQ8gGyhdTdr6AtdEF017WhYC8AnMM58A&utm_source=alert

An ongoing legal challenge is threatening the guarantee of free preventive care in the Affordable Care Act (ACA).

Six individuals and the owners of two small businesses sued the federal government, arguing that the ACA provision “makes it impossible” for them to purchase health insurance for themselves or their employees that excludes free preventive care. The plaintiffs argue that they do not want or need such care. They specifically name the medication PrEP (used to prevent the spread of HIV), contraception, the HPV vaccine, and screening and behavioral counseling for sexually transmitted diseases and substance use; however, they seek to invalidate the entire ACA preventive benefit package.

A federal trial court judge agreed with some of their claims and invalidated free coverage of more than 50 services, including lung, breast, and colon cancer screenings and statins to prevent heart disease.

This ruling, which is currently being appealed, strips free preventive services coverage from more than 150 million privately insured people and approximately 20 million Medicaid beneficiaries who are covered under the ACA’s Medicaid expansion.

This suit was first filed in 2020. The plaintiffs in the case, Braidwood Management v. Becerra, continue to oppose the entire preventive benefit package, which consists of four service bundles: services rated “A” or “B” by the United States Preventive Services Task Force (USPSTF); routine immunizations recommended by the Advisory Committee on Immunization Practices (ACIP); evidence-informed services for children recommended by the Health Resources and Services Administration (HRSA); and evidence-informed women’s health care recommended by HRSA. The trial judge invalidated all benefits recommended by the USPSTF after March 23, 2010, the date the ACA became law. (The court also exempted the plaintiffs on religious grounds from their obligation to cover PrEP.) The Fifth Circuit put the trial court’s decision on temporary hold while the case is on appeal.

The Fifth Circuit, one of the nation’s most conservative appeals courts, will hear the Biden administration’s appeal of the trial court’s USPSTF ruling and the entirety of the plaintiffs’ original challenge, thereby putting all four coverage guarantees in play. The court also will hear whether the ruling should apply only to the plaintiffs or to all Americans.

The trial court held that the USPSTF lacks the legal status necessary under the Constitution to make binding coverage decisions, and that the Secretary of the U.S. Department of Health and Human Services (HHS) — who can make such binding decisions — lacks the power to rectify matters by formally adopting USPSTF recommendations. The judge concluded that federal law fails to require that members be presidential nominees confirmed by the Senate under the Appointments Clause; in the judge’s view, this means that members are not politically accountable for their decisions, which is constitutionally problematic. The judge also ruled that federal law makes the USPSTF the final coverage arbiter, which means that the HHS Secretary, who is nominated and confirmed under the Appointments Clause and thus politically accountable, cannot cure the constitutional problem by ratifying USPSTF recommendations.

On appeal, the Biden administration argues that the USPSTF passes constitutional muster because the HHS Secretary, who oversees the Task Force, is a nominated and confirmed constitutional officer. Alternatively, the administration argues the appeals court should interpret the statute as allowing the HHS Secretary to ratify USPSTF recommendations, since the law specifies that USPSTF members are independent of political pressure only “to the extent practicable.” The administration makes similar arguments on behalf of ACIP and HRSA.

The plaintiffs argue that secretarial ratification cannot cure the constitutional problems with all three advisory bodies. According to the plaintiffs, none of the advisory bodies has the status of constitutional officers demanded by the Appointments Clause, and so their recommendations must remain recommendations only, unenforceable by HHS on insurers, health plans, and state Medicaid programs.

The second issue is the scope of the remedy if the law is found unconstitutional. The trial court did not limit its holding to the four individual plaintiffs and two companies who sued, but instead applied its order nationwide. The Biden administration argues that, if the coverage guarantee is unconstitutional, the court only should prohibit HHS from enforcing the preventive services provision against the plaintiffs who brought the lawsuit and should allow the coverage guarantee to remain in force for the rest of the country. Citing an amicus brief filed by the American Public Health Association and public health deans and scholars, the administration argues that barring HHS from enforcing the preventive services requirement nationwide “pose[s] a grave threat to the public health” by decreasing Americans’ access to lifesaving preventive services. The plaintiffs argue that a nationwide prohibition is necessary, the broader public interest in free preventive coverage is irrelevant, and insurers will voluntarily continue to offer free preventive coverage if people want it.

The administration’s arguments on appeal have attracted amicus briefs by bipartisan economic scholars, organizations concerned with health equity and preventive health, health care organizations, and 23 states.

Crucially, the economists point out that, prior to the ACA, comprehensive free preventive coverage was extremely limited because it is not in insurers’ interest to make a long-term economic investment in members’ health. Indeed, prior to the ACA, insurers did not even uniformly cover the basic screenings for newborns to detect treatable illnesses and conditions.

Amicus briefs supporting the plaintiffs have been filed by Texas and an organization dedicated to “protecting individual liberties . . . against government overreach.” All briefing will be complete by November 3, 2023, with oral argument thereafter. A decision is likely in early to mid-2024. Whatever the outcome, expect a Supreme Court appeal given the size of the stakes in the case.

Ryder Cup Lessons for Team USA Healthcare

Posted on by • Posted in Affordability, Health Insurance Coverage Adequacy, Health Policy, Healthcare Reform, Lobbyist, Medical Debt, Mortality, Out of Pocket Expenses, Outcomes, Profit Motive, Public Health, Public Health Strategy, Quality of Care, Quality of Life, Underinsured, Uninsured, Universal Coverage, Universal Healthcare System • Leave a comment
Ryder Cup Lessons for Team USA Healthcare

Saturday, Congress voted overwhelming (House 335-91, Senate 88-9) to keep the government funded until Nov. 17 at 2023 levels. No surprise.  Congress is supposed to pass all 12 appropriations bills before the start of each fiscal year but has done that 4 times since 1970—the last in 1997. So, while this chess game plays out, the health system will soldier on against growing recognition it needs fixing.

In Wednesday night’s debate, GOP Presidential aspirant Nicki Haley was asked what she would do to address the spike in personal bankruptcies due to medical debt. Her reply:

“We will break all of it [down], from the insurance company, to the hospitals, to the doctors’ offices, to the PBMs [pharmacy benefit managers], to the pharmaceutical companies. We will make it all transparent because when you do that, you will realize that’s what the problem is…we need to bring competition back into the healthcare space by eliminating certificate of need systems… Once we give the patient the ability to decide their healthcare, deciding which plan they want, that is when we will see magic happen, but we’re going to have to make every part of the industry open up and show us where their warts are because they all have them”

It’s a sentiment widely held across partisan aisles and in varied degrees among taxpayers, employers and beyond. It’s a system flaw and each sector is complicit.

What seems improbable is a solution that rises above the politics of healthcare where who wins and loses is more important than the solutions themselves.

Perhaps as improbable as the European team’s dominating performance in the 44th Ryder Cup Championship played in Rome last week especially given pre-tournament hype about the US team.

While in Rome last week, I queried hotel employees, restaurant and coffee shop owners, taxi drivers and locals at the tournament about the Italian health system. I saw no outdoor signage for hospitals and clinics nor TV ads for prescriptions and OTC remedies. Its pharmacies, clinics and hospitals are non-descript, modest and understated. Yet groups like the World Health Organization (WHO) and the Organization for Economic Cooperation Development (OECD) rank Servizio Sanitario Nazionale (SSN), the national system authorized in December 1978, in the top 10 in the world (The WHO ranks it second overall behind France).

“It covers all Italian citizens and legal foreign residents providing a full range of healthcare services with a free choice of providers. The service is free of charge at the point of service and is guided by the principles of universal coverage, solidarity, human dignity, and health. In principle, it serves as Italy’s public healthcare system.” Like U.S. ratings for hospitals, rankings for the Italian system vary but consistently place it in the top 15 based on methodologies comparing access, quality, and affordability.

The U.S., by contrast, ranks only first in certain high-end specialties and last among developed systems in access and affordability.

Like many systems of the world, SSN is governed by a national authority that sets operating principles and objectives administered thru 19 regions and two provinces that deliver health services under an appointed general manager. Each has significant independence and the flexibility to determine its own priorities and goals, and each is capitated based on a federal formula reflecting the unique needs and expected costs for that population’s health. 

It is funded through national and regional taxes, supplemented by private expenditure and insurance plans and regions are allowed to generate their own additional revenue to meet their needs. 74% of funding is public; 26% is private composed primarily of consumer out-of-pocket costs. By contrast, the U.S. system’s funding is 49% public (Medicare, Medicaid et al), 24% private (employer-based, misc.) and 27% OOP by consumers.

Italians enjoy the 6th highest life expectancy in the world, as well as very low levels of infant mortality. It’s not a perfect system: 10% of the population choose private insurance coverage to get access to care quicker along with dental care and other benefits. Its facilities are older, pharmacies small with limited hours and hospitals non-descript.

But Italians seem satisfied with their system reasoning it a right, not a privilege, and its absence from daily news critiques a non-concern.

Issues confronting its system—like caring for its elderly population in tandem with declining population growth, modernizing its emergency services and improving its preventive health programs are understood but not debilitating in a country one-fifth the size of the U.S. population.

My take:

Italy spends 9% of its overall GDP on its health system; the $4.6 trillion U.S spends 18% in its GDP on healthcare, and outcomes are comparable.  Our’s is better known but their’s appears functional and in many ways better.

Should the U.S.copy and paste the Italian system as its own? No. Our societies, social determinants and expectations vary widely. Might the U.S. health system learn from countries like Italy? Yes.

Questions like these merit consideration:

Might the U.S. system perform better if states had more authority and accountability for Medicare, CMS, Veterans’ health et al?

Might global budgets for states be an answer?

Might more spending on public health and social services be the answer to reduced costs and demand?

Might strict primary care gatekeeping be an answer to specialty and hospital care?

Might private insurance be unnecessary to a majority satisfied with a public system?

Might prices for prescription drugs, hospital services and insurance premiums be regulated or advertising limited?

Might employers play an expanded role in the system’s accountability?

Can we afford the system long-term, given other social needs in a changing global market?

Comparisons are constructive for insights to be learned. It’s true in healthcare and professional golf. The European team was better prepared for the Ryder Cup competition. From changes to the format of the matches, to pin placements and second shot distances requiring precision from 180-200 yards out on approach shots: advantage Europe. Still, it was execution as a team that made the difference in its dominating 16 1/2- 11 1/2 win —not the celebrity of any member.

The time to ask and answer tough questions about the sustainability of the U.S. system and chart a path forward. A prepared, selfless effort by a cross-sector Team Healthcare USA is our system’s most urgent need. No single sector has all the answers, and all are at risk of losing.

Team USA lost the Ryder Cup because it was out-performed by Team Europe: its data, preparation and teamwork made the difference.

Today, there is no Team Healthcare USA: each sector has its stars but winning the competition for the health and wellbeing of the U.S. populations requires more.

You might need an ambulance, but your state might not see it as ‘essential’

Posted on by • Posted in Ambulance, Ambulance Desert, Ambulance Funding, Emergency Medical Services (EMS), Essential Service, Governance, Quality of Care • Leave a comment
https://stateline.org/2023/09/11/you-might-need-an-ambulance-but-your-state-might-not-see-it-as-essential/?emci=1fffa728-9e50-ee11-a3f1-00224832e1ba&emdi=33dc9d3b-b450-ee11-a3f1-00224832e1ba&ceid=312715

Ambulance services can receive state money once declared essential services.

When someone with a medical emergency calls 911, they expect an ambulance to show up.

But sometimes, there simply isn’t one available.

Most states don’t declare emergency medical services (EMS) to be an “essential service,” meaning the state government isn’t required to provide or fund them.

Now, though, a growing number of states are taking interest in recognizing ambulance services as essential — a long-awaited move for EMS agencies and professionals in the field, who say they hope to see more states follow through. Experts say the momentum might be driven by the pandemic, a decline in volunteerism and the rural health care shortage.

EMS professionals have been advocating for essential designation and more sustainable funding “for longer than I’ve been around — longer than I’ve been a paramedic,” said Mark McCulloch, 42, who is deputy chief of emergency medical services for West Des Moines, Iowa, and who has been a paramedic for more than two decades.

Currently, 13 states and the District of Columbia have passed laws designating or allowing local governments to deem EMS as an essential service, according to the National Conference of State Legislatures, a think tank that has been tracking legislation around the issue.

Those include Connecticut, Hawaii, Indiana, Iowa, Louisiana, Maine, Nebraska, Nevada, Oregon, Pennsylvania, South Carolina, Virginia and West Virginia.

And at least two states — Massachusetts and New York — have pending legislation.

Idaho passed a resolution in March requiring the state’s health department to draft legislation for next year’s legislative session.

Meanwhile, lawmakers in Wyoming this summer rejected a bill that would have deemed EMS essential, according to local media.

“States have the authority to determine which services are essential, required to be provided to all citizens,” said Kelsie George, a policy specialist with the National Conference of State Legislatures’ health program.

Among those states deeming EMS as essential services, laws vary widely in how they provide funding. They might provide money to EMS services, establish minimum requirements for the agencies or offer guidance on organizing and paying for EMS services at the local level, George said.

The lack of EMS services is acute in rural America, where EMS agencies and rural hospitals continue to shutter at record rates, meaning longer distances to life-saving care.

“The fact that people expect it, but yet it’s not listed as an essential service in many states, and it’s not supported as such really, is where that dissonance occurs,” said longtime paramedic Brenden Hayden, chairperson of the National EMS Advisory Council, a governmental advisory group within the U.S. Department of Transportation.

More financial support

There isn’t a sole federal agency dedicated to overseeing or funding EMS, with multiple agencies handling different regulations, and some federal dollars in the form of grants and highway safety funds from the Department of Transportation. Medicaid and Medicare offer some reimbursements, but EMS advocates argue it isn’t nearly enough.

“It forces it as a state question, because the federal government has not taken on the authority to require it,” said Dia Gainor, executive director for the National Association of State EMS Officials and a former Idaho state EMS director. “It’s the prerogative of the state to make the choice” to mandate and fund EMS.

In states that don’t provide funding, EMS agencies often must rely on Medicaid and Medicare reimbursements and money they get from local governments.

Many of the latter don’t have the budgets to pay EMS workers, forcing poorer communities to turn to volunteers. But the firefighter and EMS volunteer pool is shrinking nationally as the volunteer force ages and fewer young people sign up.

Overhead for EMS agencies is expensive: A basic new ambulance can cost $200,000 to $300,000. Then there are the medicine and equipment costs, as well as staff wages and farther driving distances to medical centers in rural areas.

“The fact that people expect it, but yet it’s not listed as an essential service in many states, and it’s not supported as such really, is where that dissonance occurs.”

– Paramedic Brenden Hayden, chairperson of the National EMS Advisory Council

By contrast, police departments are supported and receive funds from the U.S. Department of Justice along with local tax dollars, and fire departments are supported by the U.S. Fire Administration, although many underserved areas also rely on volunteer firefighters to fill gaps.

“We need more if we’re going to save this industry and [if] we’re going to be available to treat patients,” Hayden said. “EMS in general represents a rounding error in the federal budget.”

What’s more, reimbursements only occur if a patient is taken to an emergency room. Agencies may not receive compensation if they stabilize a patient without transporting them to a hospital.

Gary Wingrove, president of the Paramedic Foundation, an advocacy group, has co-authored studies on the lack of ambulance service and on ambulance costs in rural areas. The former Minnesota EMS state director argues that reimbursements should be adjusted on a cost-based basis, like critical-access medical centers that serve high rates of uninsured patients and underresourced communities.

A rural crisis

About 4.5 million people across the United States live in an “ambulance desert,” and more than half of those are residents of rural counties, according to a recent national study by the Maine Rural Health Research Center and the Rural Health Research & Policy Centers. The researchers define an ambulance desert as a community 25 minutes or more from an ambulance station.

Some regions are more underserved than others: States in the South and the West have the most rural residents living in ambulance deserts, according to the researchers, who studied 41 states using data from 2021 and last year.

In South Dakota, the Rosebud Sioux Reservation covers a 1,900-square-mile area in the south-central part of the state.

State Rep. Eric Emery, a Democrat, is a paramedic and EMS director of the tribe’s sole ambulance station, providing services to 11,400 residents.

Emery and his colleagues respond to a variety of critical calls, from heart attacks to overdoses. They also provide care that people living on the reservation would otherwise get in the doctor’s office — if it didn’t take the whole day to travel to one. Those services might include taking blood pressure measurements, checking vital signs or making sure that a diabetic patient is taking their medicine properly.

Nevertheless, South Dakota is one of 37 states that doesn’t designate emergency medical services as essential, so the state isn’t required to provide or fund them.

While he and his staff are paid, remote parts of the reservation are often served by their respective county volunteer EMS agencies. It would simply take Emery’s crew too long — up to an hour — to arrive to a call.

“Something I wanted to tackle this year is to really look into making EMS an essential service here in South Dakota,” Emery said. “Being from such a conservative state that’s very conservative when it comes to their pocketbook, I know that’s probably going to be a really hard hill to climb.”

Ultimately, Wingrove said, officials need to value a profession that relies on volunteers to fill funding and staffing gaps.

“We’re looking for volunteers to make decisions about whether you live or die,” he said.

“Somehow, we have placed ourselves in a situation where the people that actually make those decisions are just not valued in the way they should be valued,” he said. “They’re not valued in the city budget, the county budget, the state budget, the federal budget system. They’re just not valued at all.”

New Jersey hospital to suspend healthcare benefits from striking nurses

Posted on by • Posted in Collective Bargaining, Employee Benefits, Health System, Labor Strike, Labor Union, Labor Union Grievance, Mediation, Quality of Care, Recruiting, Retention, Talent Acquisition Strategy, Talent Management • Leave a comment
https://www.beckershospitalreview.com/hr/new-jersey-hospital-to-suspend-healthcare-benefits-from-striking-nurses.html?origin=BHRE&utm_source=BHRE&utm_medium=email&utm_content=newsletter&oly_enc_id=2893H2397267F7G

Robert Wood Johnson University Hospital in New Brunswick, N.J., said it plans to temporarily cut off healthcare benefits for striking union workers, effective Sept. 1.

Hospital spokesperson Wendy Gottsegen described the move as unfortunate.

“We have said all along that no one benefits from a strike — least of all our nurses. We hope the union considers the impact a prolonged strike is having on our nurses and their families,” Ms. Gottsegen said in an Aug. 28 news release shared with Becker’s. “As of Sept. 1, RWJUH nurses must pay for their health benefits through COBRA. This hardship, in addition to the loss of wages throughout the strike, is very unfortunate and has been openly communicated to the union and the striking nurses since prior to the walkout on Aug. 4.”

The ongoing strike involves the United Steelworkers Local 4-200, which represents about 1,700 nurses at the facility.

Union members voted to authorize a strike in July. The union and hospital have been negotiating a new agreement for months, with the last bargaining session occurring Aug. 16.

During negotiations, the union has said it seeks a contract that provides safe staffing standards, living wages and quality, affordable healthcare.

Local 4-200 President Judy Danella, RN, said in a previous union release, “Our members remain deeply committed to our patients. However, we must address urgent concerns, like staffing. We need enough nurses on each shift, on each floor, so we can devote more time to each patient and keep ourselves safe on the job.”

Several nurses told TAPinto New Brunswick last week that they began preparing for the current situation ahead of the strike, taking overtime shifts and saving as much money as possible. Others told the publication they are taking part-time jobs or temporary employment elsewhere in the nursing field or adjacent roles.

“I think it’s important that you [remember] you might not get the job you want to do at that moment, but people have to do what they have to do to get it done,” Jessica Newcomb, RN, told TAPinto New Brunswick.

Meanwhile, the hospital has contracted with an agency to hire replacement nurses during the strike. 

“As always, our top priority is to our patients. RWJUH is open, fully operational and completely staffed, and we remain steadfast in our commitment to deliver the highest quality and always-safe patient care,” Ms. Gottsegen said.

As of Aug. 28, no further dates for negotiations were scheduled by mediators.