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Massachusetts officials attach stiff conditions to Beth Israel-Lahey merger
Dive Brief:
- Massachusetts public health officials have set tough new conditions for the proposed merger of Beth Israel Deaconess Medical Center and Lahey Health that will require the parties to demonstrate they’re holding down costs while ensuring access to low-income patients, The Boston Globe reports.
- The conditions, laid out at a Wednesday meeting of the state’s Public Health Council, include yearly reporting of how the hospitals will apply savings from the merger to enhance care quality and access to services. If savings surpass the state’s 3.1% benchmark for controlling healthcare costs, the new system will have to put more money back into services and community hospitals and clinics.
- The conditions also require the system, within six months, to develop a plan to increase services to Medicaid patients and, within two years, ensure full participation by Beth Israel-Lahey physicians in the state Medicaid program.
Dive Insight:
The conditions follow a Health Policy Commission report that warned the merger could result in a $128.4 million to $170.8 million increase in healthcare spending for inpatient, outpatient and adult primary care services and up to $59.7 million for specialty physician services.
The commission concluded that while the merger could lead to improvements in quality and efficiencies, the companies hadn’t explained how that would happen. The new conditions call for a second report in five years to assess the merger’s impact on healthcare costs and services in the state.
BIDMC CEO Kevin Tabb called the commission’s conditions “strict,” but said they won’t discourage the planned merger. “While the conditions are unprecedented, we are eager to move forward together as Beth Israel Lahey Health,” he told Healthcare Dive via email. “The status quo in this market is unacceptable, and it’s time to do something different.”
As mergers and acquisitions continue in healthcare, potential problems could lead to more stringent conditions. Research has shown, for example, that horizontal mergers can drive up costs. Once completed, Beth Israel-Lahey Health would rival Partners HealthCare System in terms of market share in Massachusetts. The new company could use its increased bargaining power to raise prices for commercial payers, increasing healthcare spending.
A recent National Bureau of Economic Research analysis also played down the extent to which hospital mergers increase efficiencies. According to NBER, acquired hospitals save just 1.5% of total costs following a merger — or an average of $176,000 a year.
And a recent University of California-Berkeley study of health system consolidation in the state found that highly concentrated markets led to higher hospital and physician service fees, as well as higher Affordable Care Act premiums, especially in northern California.
Managing across conflicting business models
https://us17.campaign-archive.com/?u=526c5e99ee0439b6f83f7c051&id=1f51eaa989
Recall that over the past few weeks, we’ve been sharing our framework for thinking through the path forward for traditional health systems, as they look to drive value for consumers. We began by describing today’s typical health system as “Event Health”, built around a fee-for-service model of delivering discrete, single-serve interactions with patients. We then proposed the concept of “Episode Health”, which would ask the health system to play a coordinating role, curating and managing a range of care interactions to address broader episodic needs. Finally, last week we shared our vision for “Member Health”, in which the system would re-orient around the goal of building long-term, loyalty-based relationships with consumers, helping them manage health over time. In this broader conception, the health system would “curate” a network of providers of episodes, and events within those episodes, and ensure that the consumer (and their information) moves seamlessly across care interactions.
As we mentioned earlier, most successful health systems will play a combination of these roles at the same time, pursuing strategies that allow them to manage episodes while moving closer to a risk-based model that gives them the ability to create a member value proposition for consumers. As the graphic below illustrates, however, that pluralistic approach will create some important tensions for the health system.
Episode Health is fundamentally a fee-for-service approach—these systems will become specialists in delivering specific episodes (e.g., joint replacement), and will seek to drive increased volume through their model. That may not be an ideal outcome on the Member Health side of the business, however, where more episode volume could mean lower profitability, given the capitation-like incentives of “owning lives”. That’s a tension that faces every health system with its own health plan—even systems that have been pursuing both strategies for years still find it challenging to manage across conflicting incentive models. (Witness Intermountain Healthcare, long a pioneer of the Member Health model, which is in the midst of a structural overhaul to allow it to better manage across the two businesses.)
Recognizing the tensions inherent in shifting away from Event Health toward more comprehensive approaches is critical for organizations looking to make the leap forward. Health systems run the risk of being doomed by their own success if they don’t take steps to realign operating structures, administrative and clinical incentive schemes, and even market-facing branding to navigate the complexity inherent in running parallel business models.
11 headwinds facing hospitals and health systems
It’s not all bleak and this is part of a larger talk on healthcare as a zero sum game. But here are 11 headwinds facing systems.
1. Pharmaceutical costs particularly non-generic.
2. Payers expanding into providers and combining with providers.
3. Payer market share.
4. Health IT and cybersecurity costs.
5. Labor costs and a labor intensive business.
6. High costs of bricks and mortar.
7. Medicare as a larger percentage of health system revenue and Medicare reimbursement softening now and over time as federal deficits rise.
8. Slowing overall healthcare inflation as hospital costs rise.
9. Siphoning off of better paying commercial patients.
10. Siphoning off of profitable ancillaries.
11. Entry of big technology firms into healthcare.
Test for the ACA
 |
| The politics and substantive rules of the road for the Affordable Care Act are more stable now than they have been in years. But chaos is never far away.
What to watch: The upcoming ACA enrollment season, which starts Nov. 1, will be the first one with the Trump administration’s agenda fully in place, and it will test just how effective that agenda is.
This period of relative certainty could come undone in court.
The bottom line: We’re either adjusting to the new normal, or in the calm before the storm. A federal judge in Texas and a six-week enrollment period will tell us which. — Sam Baker Sign up for Sam’s daily Vitals newsletter here. |
How to Fix Bullying Culture in Health Care
https://www.kevinmd.com/blog/2018/06/how-to-fix-bullying-in-health-care.html
When we think of bullying, we’re usually worrying about our school-age kids or remembering bad experiences from high school.
We learn quickly in the health care field that bullies don’t change once they enter the clinical world. Health care, with its incredible differential in knowledge, authority and pay creates large power differentials and easily generates subordinate/superior relationship dynamics.
Bullying occurs within professions between trainees and trainers and faculty, and across clinical areas when there are knowledge differences such as between specialists and primary care. Mistreatment also frequently occurs in an interdisciplinary manner between physicians and non-physicians, supervisors and direct reports, nurses, and technicians.
For many (bully and bullied alike), this has been considered the price of entry into the healthcare arena.
The fears generated by the power differentials are very real:
- loss of one’s job
- loss of referrals
- loss of business to a competitor
Through trial and error, bullies find the right formula to preserve the power dynamics.
These unspoken fears create a culture of silence. It then becomes very difficult to achieve a culture of high reliability, which operates on a framework of deference to everyone’s expertise with an intense preoccupation with avoiding errors and failure. I have seen this culture of silence lead to OR fires and use of new OR equipment and procedures without adequate training or supervision.
An organization-wide “anti-bullying statement” should stop the problem, right? Not likely. An organization where I once served in administration had such a statement but also had a “hidden agenda,” i.e., ‘”We need these doctors to bring in business and need these nurses’ experience.” It led to confusion as to what the organization would stand for. Staff began accepting physician rounding at 10 p.m. and used equipment in the OR without proper training.
Working with the medical staff leadership, we opened some honest conversations around patient safety. Both groups were surprised. The medical staff thought administration was OK with the unsafe behaviors; the administration team hadn’t even been made aware of them until that point.
Having a policy against disruptive physicians and nurses is a Band-Aid for a much deeper issue. Many physicians rightly resent the implication that a legitimate disagreement with another healthcare professional can immediately and irrevocably label one “disruptive” without a fair hearing. Stories of false accusations fuel the need for physicians to protect each other, to the detriment of improving the system.
There are more effective ways to address this complex problem. Those on the “wrong side” of the power differential need scripting to defuse the confrontation. For example, a nurse being yelling at by a physician about being paged at 2:00 a.m. regarding “non-urgent orders” could neutralize the situation by calling attention to the behavior, while still allowing an escape route for de-escalation by saying “It sounds like you are having a bad night. Are you yelling at me or simply venting?” Simple lines like these can empower line staff to safely de-escalate these situations and re-train those on the “right side” of the power differential.
Now, a single physician or nurse practicing scripting won’t be able to implement a culture change. It’s up to medical and nursing officers to establish the expectation that physicians and nurses will learn and apply such tools.
Medical staff officers must enlighten clinicians on how a culture of fear leads to more complications and patient harm. Medical errors occur when the safety systems designed to catch an error before it reaches a patient are short-circuited, which is commonplace if physicians give in to the doctor yelling the loudest.
Research from the Vanderbilt Center for Patient and Professional Advocacy in Patient Advocacy Reporting System (PARS) and Co-Worker Observation Reporting System (CORS) databases supports the notion that truly disruptive physicians are the minority and can be identified by staff and patient complaints. It further validates the potentially adverse outcomes and unsafe environment physician bullies perpetuate.
Their research also shows that “what gets measured, matters” as these “disruptive providers” don’t always need to be reported to NPDB. Some physicians simply need to understand that their behavior, though considered acceptable in past generations, needs to change.
With new scripting to manage an increasingly difficult health care environment and clear expectations laid out by medical staff officers, it’s entirely reasonable to expect the same zero tolerance for bullying in health care environments that now exists in our children’s schools.
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HENRY KOTULA 
