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Walmart looks to add health clinics in its parking lots
Walmart stores in several states are transforming extra parking lot space into “town centers,” some of which could include health clinics, according to Business Insider.
“The Walmart Town Center concept is an exciting approach to how we serve our customers by moving beyond the store’s four walls and reimagining how we use our unique assets — our existing stores and the surrounding land — to transform how customers experience Walmart,” a Walmart spokesperson told Business Insider.
Walmart provides details about a few of the new hubs on a website established for the projects. The Atlanta Business Chronicle reports that Walmart is evaluating whether to add health clinics in some of the new “town centers.”
“We envision a more robust and dynamic shopping experience that combines entertainment venues, curated local food vendors, health and fitness services as well as recreational opportunities in a way that connects and engages with the community,” a Walmart spokesperson told Business Insider.
Walmart has established its position as a one-stop shop, but the retailer may be redefining what that means by surrounding its stores with a variety of complementary tenants, according to the report.
UPMC physician among 11 killed in Pittsburgh synagogue shooting
Jerry Rabinowitz, MD, was among the at least 11 people killed after a man opened fire at the Tree of Life synagogue in Squirrel Hill, Pa., early Oct. 27, according to NBC News.
Here are six things to know:
1. Robert Bowers, 46, entered the synagogue Oct. 27 armed with an AR-15 semi-automatic rifle and three handguns, CBS News reports. The incident lasted roughly 20 minutes, during which 11 people were killed and at least six were injured. Mr. Bowers eventually surrendered himself to police.
2. During the shooting, Mr. Bowers reportedly expressed hatred toward Jewish people, according to a charging document obtained by CBS News. Federal prosecutors are seeking approval to pursue the death penalty against Mr. Bowers, who is expected to make his first court appearance Oct. 29.
3. Among the 11 killed was Dr. Rabinowitz, a 66-year-old primary care physician from Edgewood Borough, Pa., according to CNN. In a Facebook post Oct. 28, Dr. Rabinowitz’s nephew said, “When [Dr. Rabinowitz] heard shots he ran outside to try and see if anyone was hurt and needed a doctor. … That was Uncle Jerry, that’s just what he did.”
4. Dr. Rabinowitz was affiliated with Pittsburgh-based UPMC. Tami Minnier, BSN, MSN, RN, chief quality officer of Pittsburgh-based UPMC Shadyside, told the Pittsburgh Post-Gazette, “The UPMC family, in particular UPMC Shadyside, cannot even begin to express the sadness and grief we feel over the loss of Dr. Jerry Rabinowitz.”
5. A spokesperson for the district attorney’s office also told the Pittsburgh Post-Gazette Dr. Rabinowitz served as the personal physician for former deputy district attorney Law Claus for 30 years.
6. Pittsburgh-based UPMC and Allegheny Health Network treated seven victims of the shooting. Three UPMC physicians, Pittsburgh Emergency Medical Services and other first responders arrived on the scene within a half-hour of the shooting.
A Sense of Alarm as Rural Hospitals Keep Closing
The potential health and economic consequences of a trend associated with states that have turned down Medicaid expansion.
Hospitals are often thought of as the hubs of our health care system. But hospital closings are rising, particularly in some communities.
“Options are dwindling for many rural families, and remote communities are hardest hit,” said Katy Kozhimannil, an associate professor and health researcher at the University of Minnesota.
Beyond the potential health consequences for the people living nearby, hospital closings can exact an economic toll, and are associated with some states’ decisions not to expand Medicaid as part of the Affordable Care Act.
Since 2010, nearly 90 rural hospitals have shut their doors. By one estimate, hundreds of other rural hospitals are at risk of doing so.
In its June report to Congress, the Medicare Payment Advisory Commission found that of the 67 rural hospitals that closed since 2013, about one-third were more than 20 miles from the next closest hospital.
A study published last year in Health Affairs by researchers from the University of Minnesota found that over half of rural counties now lack obstetric services. Another study, published in Health Services Research, showed that such closures increase the distance pregnant women must travel for delivery.
And another published earlier this year in JAMA found that higher-risk, preterm births are more likely in counties without obstetric units. (Some hospitals close obstetric units without closing the entire hospital.)
Ms. Kozhimannil, a co-author of all three studies, said, “What’s left are maternity care deserts in some of the most vulnerable communities, putting pregnant women and their babies at risk.”
In July, after The New York Times wrote about the struggles of rural hospitals, some doctors responded by noting that rising malpractice premiums had made it, as one put it, “economically infeasible nowadays to practice obstetrics in rural areas.”
Many other types of specialists tend to cluster around hospitals. When a hospital leaves a community, so can many of those specialists. Care for mental health and substance use are among those most likely to be in short supply after rural hospital closures.
The closure of trauma centers has also accelerated since 2001, and disproportionately in rural areas, according to a study in Health Affairs. The resulting increased travel time for trauma cases heightens the risk of adverse outcomes, including death.
Another study found that greater travel time to hospitals is associated with higher mortality rates for coronary artery bypass graft patients.
In many communities, hospitals are among the largest employers. They also draw other businesses to an area, including those within health care and others that support it (like laundry and food services, or construction).
A study in Health Services Research found that when a community loses its only hospital, per capita income falls by about 4 percent, and the unemployment increases by 1.6 percentage points.
Not all closures are problematic. Some are in areas with sufficient hospital capacity. Moreover, in many cases hospitals that close offer relatively poorer quality care than nearby ones that remain open. This forces patients into higher-quality facilities and may offset negative effects associated with the additional distance they must travel.
Perhaps for these reasons, one study published in Health Affairs found no effect of hospital closures on mortality for Medicare patients. Because it focused on older patients, the study may have missed adverse effects on those younger than 65. Nevertheless, the study found that hospital closings were associated with reduced readmission rates, which is regarded as a sign of increased quality. So it seems consolidating services at larger hospitals can sometimes help, not harm, patients.
“There are real trade-offs between consolidating expertise at larger centers versus maintaining access in local communities,” said Karen Joynt Maddox, a cardiologist and health researcher with the Washington University School of Medicine in St. Louis and an author of the study. “The problem is that we don’t have a systematic approach to determine which services are critical to provide locally, and which are best kept at referral centers.”
Many factors can underlie the financial decision to close a hospital. Rural populations are shrinking, and the trend of hospital mergers and acquisitions can contribute to closures as services are consolidated.
Another factor: Over the long term, we are using less hospital care as more services are shifted to outpatient settings and as inpatient care is performed more rapidly. In 1960, an average appendectomy required over six days in the hospital; today one to two days is the norm.
Part of the story is political: the decision by many red states not to take advantage of federal funding to expand Medicaid as part of the Affordable Care Act. Some states cited fiscal concerns for their decisions, but ideological opposition to Obamacare was another factor.
In rural areas, lower incomes and higher rates of uninsured people contribute to higher levels of uncompensated hospital care — meaning many people are unable to pay their hospital bills. Uncompensated care became less of a problem in hospitals in states that expanded Medicaid.
In a Commonwealth Fund Issue Brief, researchers from Northwestern Kellogg School of Management found that hospitals in Medicaid expansion states saved $6.2 billion in uncompensated care, with the largest reductions in states with the highest proportion of low-income and uninsured patients. Consistent with these findings, the vast majority of recent hospital closings have been in states that have not expanded Medicaid.
In every year since 2011, more hospitals have closed than opened. In 2016, for example, 21 hospitals closed, 15 of them in rural communities. This month, another rural hospital in Kansas announced it was closing, and next week people in Kansas, and in some other states, will vote in elections that could decide whether Medicaid is expanded.
Richard Lindrooth, a professor at the University of Colorado School of Public Health, led a study in Health Affairs on the relationship between Medicaid expansion and hospitals’ financial health. Hospitals in nonexpansion states took a financial hit and were far more likely to close. In the continuing battle within some states about whether or not to expand Medicaid, “hospitals’ futures hang in the balance,” he said.
DIALYSIS GIANT DAVITA DEFENDS ITSELF IN COURT AND AT THE POLLS
Proposition 8 would wipe out DaVita’s earnings in California, according to recent investment firm reports. Passing the initiative ‘would be so devastating,’ to the tune of $450 million a year, that DaVita ‘would likely walk away from the state altogether.’
It’s been a year of playing defense for DaVita Inc., one of the country’s largest dialysis providers.
A federal jury in Colorado this summer awarded $383.5 million to the families of three of its dialysis patients in wrongful death lawsuits. Then this month, the Denver-based company announced it would pay $270 million to settle a whistleblower’s allegation that one of its subsidiaries cheated the government on Medicare payments.
But its biggest financial threat is a ballot initiative in California that one Wall Street firm says could cost DaVita $450 million a year in business if the measure succeeds.
Despite these recent hits, the company continues to rake in profits and receive favorable ratings from stock analysts. Its shares are trading at about $65 a share, only about 19 percent below a 52-week high set in January. That’s largely because DaVita controls about one-third of a growing market, health experts say.
“They don’t really have many rivals, and they perform a necessary, lifesaving service,” said Leemore Dafny, a professor of business administration at Harvard Business School. “If you’re producing something people want to buy and you’re the only one making it, people are going to buy it.”
Patients with chronic kidney failure often need dialysis to filter the impurities from their blood when their kidneys can no longer do that job.
And as Americans live longer and get heavier, more people become diagnosed with kidney disease and possibly need dialysis. In 2015, 124,114 new patients received dialysis, up from 94,702 in 2000, a 31 percent increase, according to the U.S. Renal Data System.
DaVita is one of the largest dialysis providers in the country, operating more than 2,500 clinics nationwide. In California, the company operates 292 clinics, half of all chronic dialysis clinics in the state.
Its parent company, DaVita Inc., reported $10.9 billion in revenue last year and $1.8 billion in profits, almost all of which came from its dialysis business.
This year, company officials project the dialysis group will bring in $1.5 billion to $1.6 billion in profits. It’s a big turnaround for a corporation that could barely make payroll in 1999, when it was under review by the Securities and Exchange Commission for questionable accounting practices. Its success has largely been credited to CEO Kent Thiry, a colorful personality who has dressed up as a Musketeer and ridden a horse into corporate meetings to rally workers.
Now those big profits — generated from treating sick patients — has put a target on the company’s back, as well as that of its biggest competitor, Fresenius Kidney Care.
The Service Employees International Union succeeded this year in placing Proposition 8 on California’s Nov. 6 ballot, which would limit dialysis center commercial revenues to 115 percent of patient care costs. The ballot fight pits a well-funded industry against labor and the California Democratic Party.
DaVita declined to make anyone available for this article, but in a statement said Proposition 8 “will limit patients’ access to life-saving dialysis treatments, jeopardizing their care.”
Last year, roughly two-thirds of DaVita’s dialysis revenue came from government-based programs, such as Medicare and Medicaid. But that isn’t enough to cover its costs, according to the company’s 2017 annual report, which states that DaVita loses money on each Medicare treatment it provides. (Medicare covers dialysis for people 65 and older, and for younger patients after private insurance has provided coverage for 30 months.)
Instead, DaVita generates profits from commercial health plans, which it acknowledges pay “significantly higher” rates than government programs. The ballot measure targets those higher rates, which Dafny describes as “their bread and butter.”
The prospect of the measure passing led DaVita to delay or cancel plans to open new clinics in California despite growing patient demand, Javier Rodriguez, chief executive officer of DaVita Kidney Care, told investors on a call in May, according to the online equity research website Seeking Alpha.
A few months later, Rodriguez declined to provide a dollar amount when asked how the initiative would impact the company. Rather, he warned investors that it would become “unsustainable” for the industry to treat the estimated 66,000 dialysis patients in California, should the measure succeed.
Wall Street analysts agree that Proposition 8 would wipe out DaVita’s earnings in California, according to recent reports issued by investment firms J.P. Morgan and Baird. Passing the initiative “would be so devastating,” to the tune of $450 million a year, that DaVita “would likely walk away from the state altogether,” according to a March Baird report.
DaVita has poured $66.6 million into the opposition campaign as of Oct. 25, and rival Fresenius has contributed $33.6 million. That dwarfs $17.3 million in union contributions in support of the measure, according to campaign records filed with California’s secretary of state office.
Both Wall Street firms conclude that Proposition 8 is likely to fail, citing the industry’s massive spending and the union’s record of failure at the polls on other issues.
The company’s legal troubles don’t worry stock analysts, either; Baird’s October report on DaVita’s financial performance dedicates just two sentences to them. It notes that DaVita “is subject to numerous ongoing government investigations and inquiries, similar to most large-scale, high-profile Medicare providers.”
There are no specific references to the Colorado jury award this summer, which the company is appealing, over the death of three patients who died of cardiac arrest after treatment at DaVita clinics. Nor was there concern about this month’s $270 million settlement over Medicare billing.
That’s because those incidents are seen by investors as the cost of doing business — one-time hits that don’t affect a company’s earnings power in the future, said Matthew Gillmor, a senior research analyst at Baird.
“Almost all companies I follow, at some point, have had to pay a fine to the government,” Gillmor said.
Thiry, DaVita’s CEO, acknowledged that settlements, which aren’t good public relations, are a reality for large corporations, when The Denver Post asked him last year about the company’s previous legal battles.
“If, in a trial, you are found to be wrong on even a small part of the case, it could mean that you are excluded from Medicare, which typically would mean bankruptcy for your company,” Thiry said. “So, you are essentially forced to settle.”
HOSPITALS SHOULD BE BRACING FOR SITE-NEUTRAL PAYMENTS
https://www.healthleadersmedia.com/finance/hospitals-should-be-bracing-site-neutral-payments
Even if the Trump administration were to delay its proposed site-neutral payments policy for outpatient facilities another year or longer, the political debate isn’t going away.
KEY TAKEAWAYS
Prominent hospital groups have said the rule, as proposed, would be illegal.
Lawmakers from both sides of the aisle in both chambers of Congress have voiced opposition.
Hospitals should do their long-term budgeting and strategizing with site-neutrality in mind.
A controversial proposal to cut reimbursement rates for hospital outpatient departments could be finalized this week if the Centers for Medicare & Medicaid Services hits its target date to publish the final rule.
The proposed change to the Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System unveiled last July has drawn criticism from the American Hospital Association (AHA), America’s Essential Hospitals (AEH), lawmakers in both houses of Congress, and others who contend the so-called “site-neutral” payment policies fail to account for the added burden hospital-owned facilities shoulder.
Both AHA and AEH said in formal comments last month that the OPPS/ASC proposal for 2019 appears to be illegal. And lawmakers raised related concerns in two separate letters to CMS Administrator Seema Verma, suggesting the proposal flouts congressional intent.
A bipartisan group of 48 senators signed a letter last month urging CMS to rethink its approach, and a bipartisan group of 138 representatives followed suit this month with a letter of their own.
The political pressure could very well leave an imprint on the final version of the rule, which has been under review by the Office of Management and Budget since October 10. A spokesperson for CMS told HealthLeaders that the agency would not speculate on the potential outcome of the review process, reiterating the agency’s plan to publish the final version on or about Thursday, November 1.
But even if the Trump administration were to postpone the site-neutral payments policy another year or longer, hospitals should still be preparing for site-neutrality, since this political debate will play itself out over the next several years one way or another, says Greg Hagood, a senior managing director with the financial advisory firm SOLIC Capital.
That preparation for site-neutrality should include an ambulatory strategy with investments in outpatient settings, Hagood said, with a word of caution for hospitals and health systems.
“I think they need to do their budgeting, though, with an eye toward the fact that certain areas that have historically been anchors to the hospital—whether that’s the emergency room, cardiac care, or some of these hospital outpatient departments—are likely to see diminished margins,” he said.
Basing a budget around more-conservative revenue estimates for these service lines could prompt hospitals to rationalize their cost structures or even adjust their infrastructure, such as by reducing their number of clinics or inpatient beds, Hagood said.
Although the concept of site-neutrality “makes a ton of sense” on the surface, there’s also a complex history in how American reimbursement models have evolved over the past few decades, and hospitals provide expensive services that other outpatient facilities often don’t, such as indigent care, Hagood said. Switching to a site-neutral system would have “a very economically disruptive impact on a lot of large health systems,” he added.
The debate gains another layer of intrigue when you consider how any action taken by lawmakers will be perceived by their constituents.
“If you want to make a congressman vulnerable,” Hagood said, “you’ll say he was supportive of a policy that results in a closure of a hospital in your district.”
Cartoon – Rule #1 : There is no Substitute for Innovation
HENRY KOTULA 