The impossibility of bipartisan health-care compromise

https://theweek.com/articles/811962/impossibility-bipartisan-healthcare-compromise

People yelling at each other.

If there’s one thing political centrists claim to value, it’s compromise. It’s “the way Washington is supposed to work,” writes Third Way’s Bill Schneider. “Centrists, or moderates, are really people who are willing to compromise,” The Moderate Voice‘s Robert Levine tells Vice.

What does this mean when it comes to health care and the developing lefty push for Medicare-for-all? The fresh new centrist health-care organization, the Partnership for America’s Health Care Future (PAHCF), says it is a “diverse, patient-focused coalition committed to pragmatic solutions to strengthen our nation’s health-care system.” In keeping with the moderate #brand, PAHCF may not support Medicare-for-all. But perhaps they might support a quarter-measure compromise, like allowing people under 65 to buy into Medicare?

Haha, of course not. Their offer is this: nothing.

Valuing compromise in itself in politics is actually a rather strange notion. It would make a lot more sense to determine the optimal policy structure through some kind of moral reasoning, and then work to obtain an outcome as close as possible to that. Compromise is necessary because of the anachronistic (and visibly malfunctioning) American constitutional system, but it is only good insofar as it avoids a breakdown of democratic functioning that would be even worse.

However, “moderation” is routinely not even that, but instead a cynical veneer over raw privilege and self-interest. The American health-care system, as I have written on many occasions, is a titanic maelstrom of waste, fraud, and outright predation — ripping off the American people to the tune of $1 trillion annually.

And so, Adam Cancryn reports on the centrist Democrats plotting with Big Medical to strangle the Medicare-for-all effort:

Deep-pocketed hospital, insurance, and other lobbies are plotting to crush progressives’ hopes of expanding the government’s role in health care once they take control of the House. The private-sector interests, backed in some cases by key Obama administration and Hillary Clinton campaign alumni, are now focused on beating back another prospective health-care overhaul, including plans that would allow people under 65 to buy into Medicare. 

Behind the preposterously named “PAHCF” stands a huge complex of institutions that benefit from the wretched status quo. This includes the PhRMA drug lobby (Americans spend twice what comparable countries do on drugs, almost entirely because of price-gouging), the Federation of American Hospitals (Americans overpay on almost every medical procedure by roughly 2- to 10-fold), the American Medical Association (U.S. doctors, especially specialists, make far more than in comparable nations), America’s Health Insurance Plans, and BlueCross BlueShield (the cost of average employer-provided insurance for a family of four has increased by almost $5,000 since 2014, to $28,166).

The human carnage inflicted by this bloody quagmire of corruption and waste is nigh unimaginable. Perhaps 30,000 people die annually from lack of insurance, and 250,000 annually from medical error. America is a country where insurance can cost $24,000 before it covers anything, where doctors can conspire to attend each other’s surgeries so they can send pointless six-figure balance bills, where hospitals can charge the uninsured 10 times the actual cost of care, where gangster drug companies can buy up old patents and jack up the price by 57,500 percent, and on and on.

One might think this is all a bit risky. Wouldn’t it be more prudent to accept some sensible reforms, so these institutions don’t get completely driven out of business?

But wealthy elites almost never behave this way. John Kenneth Galbraith, explaining the French Revolution, once outlined one of the firmer rules of history: “People of privilege almost always prefer to risk total destruction rather than surrender any part of their privileges.” One reason is “the invariable feeling that privilege, however egregious, is a basic right. The sensitivity of the poor to injustice is a small thing as compared with that of the rich.”

And so we see with the Big Medical lobby. The vast ziggurat of corpses piled up every year from horrific health-care dysfunction is just a minor side issue compared to the similar-sized piles of profits these companies accumulate — which they will fight like crazed badgers to preserve.

As Paul Waldman points out, this means a big resistance to the prospect of doing anything at all, let alone Medicare-for-all. However, the political implication is clear. If compromise is impossible, then liberals and leftists who want to improve the quality and justice of American health care should write off the corrupt pseudo-centrists, and go for broke. Democrats should write a health-care reform bill so aggressive that it drastically weakens the profitability of Big Medical, and drives many of them out of business entirely. If you cannot join them, beat them.

 

 

 

 

Financial updates from Banner, Kaiser, Mayo + 3 other health systems

https://www.beckershospitalreview.com/finance/financial-updates-from-banner-kaiser-mayo-3-other-health-systems.html?origin=cfoe&utm_source=cfoe

The following six health systems recently released their financial statements for the nine-month period ended Sept. 30:

1. Phoenix-based Banner Health’s revenue climbed 7.2 percent year over year to $6.3 billion in the first nine months of 2018. The system ended the first nine months of this year with operating income of $122.1 million, down 37 percent from $192.9 million in the same period a year earlier.

2. Oakland, Calif.-based Kaiser Permanente’s revenue climbed to $59.7 billion in the first nine months of 2018, up 9.6 percent from revenue of $54.5 billion in the same period of 2017. Kaiser ended the first nine months of this year with operating income of $2.03 billion, compared to $2.33 billion in the same period of 2017.

3. Rochester, Minn.-based Mayo Clinic ended the first nine months of 2018 with revenue of $9.5 billion, compared to $8.8 billion in the same period of 2017. The system reported operating income of $601 million in the nine months ended Sept. 30, up 32 percent from the same period of 2017.

4. Bronx, N.Y.-based Montefiore Health System recorded revenue of $4.4 billion in the nine months ended Sept. 30, up from $4.1 billion in the same period a year earlier. The system ended the first nine months of this year with operating income of $59.6 million, up from $37.7 million in the same period of the year prior.

5. Arlington-based Texas Health Resources recorded revenue of $3.5 billion in the first nine months of 2018, up from $3.4 billion in the same period a year earlier. The system ended the first nine months of this year with operating income of $168.7 million, down from $174.5 million in the same period of 2017.

6. Pittsburgh-based UPMC reported revenue of $13.9 billion in the first nine months of this year, up from $11.4 billion in the same period of 2017. The system ended the first nine months of 2018 with operating income of $190 million, down from $196 million in the same period of 2017.

 

Pennsylvania health system, CEO will pay $12.5M to resolve billing probe

https://www.beckershospitalreview.com/legal-regulatory-issues/pennsylvania-health-system-ceo-will-pay-12-5m-to-resolve-billing-probe.html?origin=cfoe&utm_source=cfoe

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Allentown, Pa.-based Coordinated Health and its founder and CEO Emil DiIorio, MD, have entered into an agreement with the federal government to settle False Claims Act allegations, according to the Department of Justice.

The settlement resolves allegations that Coordinated Health inflated payments from federal payers by unbundling claims for reimbursement for orthopedic surgeries, including many for total joint replacement, from 2007 through mid-2014.

Instead of stopping the illegal unbundling, Dr. DiIorio changed how he wrote operative reports to enable Coordinated Health billers to maximize improperly unbundled reimbursements, according to the Justice Department.

Two outside coding consultants identified the improper unbundling during audits in 2011 and 2013 and told top Coordinated Health executives about the problem. “Motivated by its bottom line, Coordinated Health simply ignored the consultants’ recommendations and continued abusing Modifier 59 to improperly unbundle orthopedic surgery claims until mid-2014,” states a Justice Department press release.

Coordinated Health will pay $11.25 million and Dr. DiIorio will pay $1.25 million to settle the allegations. In addition to the monetary settlement, Coordinated Health entered into a corporate integrity agreement with HHS that will require monitoring of its billing practices for five years.

Regarding the settlement, Coordinated Health released the following statement: “We are pleased to have come to a resolution with the federal government regarding allegations of our past use of a specific Medicare billing modifier, involving a complex Centers for Medicare and Medicaid Services rule, which does not relate to the quality of patient care. We have already updated our billing practice to resolve the issue in question, and have taken a number of decisive actions to reduce the potential for issues in the future. Our focus has been and always will be providing the best possible patient care in the communities we serve.”

 

CMS updates hospital price transparency requirement — again

https://www.beckershospitalreview.com/finance/cms-updates-hospital-price-transparency-requirement-again.html?origin=cfoe&utm_source=cfoe

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CMS published an additional FAQ document that provides guidance for hospitals required to post their standard charges online.

In August, CMS finalized a rule requiring hospitals to publish a list of their standard charges online in a machine-readable format and to update this information at least annually. Over the past few months, CMS has attempted to answer questions about the new requirement before it kicks in Jan. 1.

CMS posted a document in September that provided the definition of “machine readable” and answered five other frequently asked questions about the price transparency rule.

CMS recently published an additional document that expanded on the rule. The agency answered seven questions about the new requirement, including one about whether hospitals are required to post information online that isn’t included in their chargemasters. CMS clarified that even if a hospital’s chargemaster does not include standard charges for drugs, biologicals, or other items and services it provides, those charges must be posted online.

 

 

 

Hospital Revenue Unstable Despite Outpatient Volume Growth

https://revcycleintelligence.com/news/hospital-revenue-unstable-despite-outpatient-volume-growth?eid=CXTEL000000093912

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Payer mix shifts, increases in self-pay, and lower Medicaid revenue per case are troubling hospital revenue despite a 2.4 percent boost in outpatient volume.

Hospitals recently saw increases in national inpatient and outpatient volumes. However, net hospital revenue continues to be unstable for non-profit organizations, according to a new analysis from the public accounting, consulting, and technology firm Crowe.

“As many health systems expand their portfolio of services (more outpatient facilities, entrees into insurance products, and other ancillary investments), stability of hospital-based net revenue becomes more important to financial decisions,” the analysis stated. “Unfortunately, instability appears to be the current trend, forcing many CFOs of not-for-profit healthcare systems to study operations and budget them on a monthly or quarterly financial performance basis, in the same manner that their peers in for-profit organizations do.”

The consulting firm analyzed data from its revenue cycle analytics solution for 622 hospitals in Medicaid expansion states and 389 hospitals in non-expansion states. The analysis of data from January through September of 2017 and 2018 revealed some positive results for 2018.

Inpatient volume is up 0.6 percent in 2018, and gross revenue per case also increased 5.3 percent during the period.

At the same time, outpatient volume rose 2.4 percent and gross revenue per case increased 7.1 percent on the outpatient side.

Hospitals may be reaping the benefits of higher volumes. However, net revenue per case demonstrated greater volatility on the inpatient and outpatient sides, the firm pointed out. Net revenue per inpatient case only increased 1.6 percent between 2017 and 2018 and net revenue per outpatient case rose 5.5 percent during the same period.

“It is important to consider that these trends do not hold true across all payers. As a result, some hospitals may be more exposed to diminishing growth in net revenue per case,” the analysis stated. “Although an increase in net revenue appears to be good news for hospitals, the manner in which revenue is increasing follows some troublesome trends.”

The “troublesome trends” identified by Crower researchers included a significant shift in payer mix. Medicare managed care, self-pay, and other payers (i.e., third-party liability and worker’s compensation) increased by 1.6 percent for inpatient and 1.1 percent for outpatient overall, the firm reported.

“In addition to these payer classes having a lower net realization overall, they also challenge finance leadership’s ability to forecast net revenue, as seasonality and patient engagement vary by facility,” the analysis explained.

Increases in self-pay accounts particularly contributed to hospital revenue instability, Crowe added. Self-pay increased 16.1 percent by 2018, representing six percent of the average hospital’s payer mix. Self-pay accounts continue to be the most difficult to collect, suggesting a growing obstacle for hospital revenue.

Medicaid net revenue also fell from 2017 to 2018, the analysis showed. Net revenue per case for both traditional and managed care Medicaid decreased 6.9 percent for inpatient and 1.1 percent for outpatient.

Hospitals that treated a greater number of Medicaid beneficiaries will continue to see their Medicaid revenue drop under new regulatory changes, researchers predicted.

For example, CMS finalized a new policy that will change the methodology for determining Medicaid Disproportionate Share Hospital (DSH) payments. Medicaid offers DSH payments to hospitals that treat a greater proportion of low-income and vulnerable patients and bases the payment amount on the hospital’s uncompensated care costs.

The new policy will clarify that uncompensated care costs include only the costs for Medicaid-eligible patients with payments remaining after accounting for the reimbursement to the hospital by or on behalf of Medicaid-eligible individuals, including Medicare and third-party payments.

A federal judge vacated the new policy’s implementation on a national level in March 2018, arguing that changing the policy exceeded CMS’ authority because the Medicaid Act specifically identifies what constitutes uncompensated care costs. Several states have also challenged the policy in court.

CMS is currently challenging the rulings.

New rules for the 340B Drug Pricing Program could also further decrease Medicaid revenue for hospitals, the analysis stated. CMS recently finalized $1.6 billion in hospital payment reductions for 340B covered drugs.

The American Hospital Association (AHA) and several other groups sued CMS over the payment cuts. But a federal judge ruled that CMS can enforce the billions of dollars in payment reductions.

Additionally, the Crowe analysis uncovered a decrease in final denial write-offs, or patient bills that were not paid by payers. Final denial write-offs for outpatient services fell by almost 15 percent from 2017 to 2018, the data showed.

While a drop in final denial write-offs indicates business office improvements, researchers noted that recent changes in managed care contracting may challenge denial rates going forward. Contracts for outpatient diagnostic imaging are likely to see the greatest challenge to denial rates, they reported.

PwC names 6 healthcare issues to watch in 2019

https://www.beckershospitalreview.com/hospital-management-administration/pwc-names-6-healthcare-issues-to-watch-in-2019.html?origin=ceoe&utm_source=ceoe

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PwC’s Health Research Institute believes 2019 is the year the “New Health Economy” will finally become a reality.

The past year marked record interest in the healthcare industry, especially from outside forces like venture capitalists and business giants like Amazon, Berkshire Hathaway and JP Morgan Chase. PwC believes forces like these mean healthcare will no longer be an “outlier” industry that operates in its own world outside the greater U.S. economy.

In its 13th annual report, PwC’s HRI identified the following six healthcare trends to watch in 2019:

1. With an injection of $12.5 billion from investors over the past two years, PwC expects connected health devices and digital therapies to become integrated into care delivery and the regulatory process for drug and device approvals. PwC expects several new products to come to market in this category in 2019. What does this mean for providers? They will need to find a way to integrate this data into the EHR so it can be used to maximize the patient visit.  

2. Artificial intelligence and automation will require healthcare organizations to invest in and train their workforce to succeed in a digital economy. Almost half (45 percent) of executives surveyed by PwC’s HRI said skill deficiencies among their workforce are holding their organization back, yet few employers are offering training in AI, robotics and automation or data analytics.

3. The 2017 Tax Cuts and Jobs Act will continue to create tax savings for healthcare organizations while creating new challenges. Providers are likely to feel the biggest challenges via changes to unrelated business taxable income, which could create new expenses. Academic medical centers may also feel minor negative pressure from the net investment excise tax on educational foundations.

4. The healthcare industry is ready for its own budget airline provider. It needs a disruptor that is low-cost, transparent, informed by technology and “laser-focused on the consumer” like Southwest Airlines, according to PwC. Organizations that answer this call are starting to emerge — like a profitable, Medicaid-focused, walk-in-only family medicine practice in Denver — but progress is slow and there isn’t one simple formula to follow. PwC advises healthcare organizations to look for patient segments that need a “budget airline” and determine how to meet those needs.

5. The pace of private equity investment is expected to accelerate as healthcare companies continue to divest noncore business units to investors next year. It also expects PE-healthcare partnerships to evolve, with some healthcare companies co-investing in their own spinoffs. PwC suggested healthcare organizations pursue PE partnerships not only for financing, but also for PE firms’ ability to provide strategic views of trends across their portfolio of investments.

6. Republican changes to the ACA will shift the law’s winners and losers. Providers are on the losing end of most of these changes, including softened insurance mandates, short-term health insurance plans, less federal support for ACA exchanges and reduced federal Medicaid spending, according to the report.

Download the report here.