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Pittsburgh council greenlights UPMC’s $400M expansion plan
Although area residents, union members and community activists spoke out against the project, the Pittsburgh City Council approved Pittsburgh-based UPMC’s proposal for a $400 million expansion, according to a Tribune Review report.
Thirty-seven people spoke in opposition of UPMC’s plan to expand its Mercy complex in Pittsburgh during a discordant meeting July 31 that lasted more than five hours. The critics demanded the hospital giant allow employees to unionize, pay more in wages and accept all patients, including ones without insurance.
Despite objection, the city council approved the project in a 7-2 vote after a councilman negotiated with the hospital giant. In the negotiations, UPMC agreed to provide an addiction clinic, mental health services and job opportunities for minorities as it moves forward with its construction plans.
The $400 million project is part of a $2 billion systemwide expansion UPMC announced last year. Plans for UPMC Mercy hospital call for a vision and rehabilitation hospital that has a specialty research and treatment center for eye ailments.
“We look forward to moving ahead with construction of the UPMC Vision and Rehabilitation Hospital at UPMC Mercy and continuing our work on initiatives to benefit the Uptown and Hill District neighborhoods and residents,” Paul Wood, a UPMC spokesperson told the Tribune Review.
Independent monitor to oversee New Jersey hospital’s finances after 4-notch downgrade by Fitch
New Jersey Gov. Phil Murphy issued an executive order directing the state’s health commissioner to appoint an independent monitor to oversee expenditures and the level of care provided at University Hospital in Newark, N.J.
The action comes after the public hospital’s bond rating was downgraded four notches by Fitch Ratings due to financial difficulties. The hospital also recently received a failing grade on quality of care from the Leapfrog Group and attempted to reduce its pediatric bed count without state approval, according to a press release from Mr. Murphy’s office.
“Given the scope of the problems found at University Hospital, these immediate actions are necessary to ensure the facility can continue providing the highest level of care to the community while it gets its fiscal house in order and improves its healthcare quality,’” said Mr. Murphy.
New Jersey Health Commissioner Shereef Elnahal, MD, appointed Judy Persichilli, BSN, RN, to serve as monitor. Ms. Persichilli is a veteran healthcare executive who most recently served as president of Livonia, Mich.-based CHE Trinity Health.
Top 5 Areas of Extreme Interest to Healthcare Executives
What issues are currently of greatest strategic importance to hospital and health system executives? The Health Care Advisory Board research team conducted the “Advisory Board Research Annual Health Care CEO Survey” to find out.
“While the survey tests interest in a wide range of topics, issues related to margin management—whether through revenue growth or cost control—rose to the top for 2018. In a particularly notable contrast to years’ past, cost control eclipsed revenue growth as executives’ most urgent strategic priority for the year,” says Yulan Egan, practice manager, Advisory Board Research.
The nationwide survey of 146 C-suite executives was conducted between December 2017 and March 2018. This year, the researchers asked respondents to rate 33 issues on a scale of “A” to “F,” with “A” indicating the greatest interest in learning more from Advisory Board researchers about the topic.
Here are the top five areas of interest to hospital and health system executives, based on the survey.
- Preparing the enterprise for sustainable cost control
This is the No. 1 concern for hospital executives (62% said they were extremely interested). That’s a higher percentage than any other topic received in the last four years, and 5% higher than for any topic received in 2017.
“The focus on long-term sustainability reflects a belief among healthcare executives that today’s margin pressures are permanent and structural in nature,” says Egan. “As a result, the current focus on cost control does not center on the types of temporary campaigns organizations have historically pursued to weather an economic downturn or a sudden shift in reimbursement policy. Instead, executives are looking for strategies to permanently bend the expense curve; doing so will require radical improvements to cost structure, such as redesigning staffing models, rationalizing service lines across their market, and even transforming their facility footprint,” she says.
2. Innovative approaches to expense reduction
For the second year in a row, C-Suite executives voted this as the No. 2 area of interest (56% of executives were extremely interested)
The healthcare cost problem has executives looking to go beyond the tried-and-true cost strategies of the past, according to Egan.
“Of particular interest today are strategies for controlling expense growth while avoiding mass lay-offs and other major drivers of employee disengagement,” she says. “Executives are also exploring the need to invest in innovative new technologies—like artificial intelligence—to drive drastic improvements in productivity and efficiency.”
3. Exploring diversified, innovative revenue streams
This number 3 area of interest (56%) has ranked near the top for the past two years.
“Executives increasingly believe that relying on conventional determinants of market share—such as competing for referrals from independent physicians—will be insufficient for driving necessary levels of revenue growth,” Egan says. “Instead, hospitals and health systems are shifting their focus to include nontraditional sources of growth, such as contracting directly with employers, commercializing intellectual property, and launching innovation hubs.”
4. Boosting outpatient procedural market share
This response has also ranked near the top for the past two years, with 50% of executives being extremely interested in this topic this year.
Technology advancements, reimbursement shifts, high deductibles, and evolving patient expectations continue the outmigration of care away from the inpatient setting, according to the survey.
“With lower barriers to entry in the outpatient setting, health systems find themselves in an increasingly competitive landscape, despite having made heavy investments in ambulatory care in recent years,” Egan says. “Successfully securing and growing outpatient market share will require hospitals and health systems to compete on the basis of convenience, service, and affordability—not just their clinical capabilities or brand.”
5. Meeting rising consumer demands for service
According to the survey, 50% of executives are extremely interested in this topic.
“As transparency in healthcare has grown thanks to services such as Yelp, service experience is becoming more important than ever before,” Egan says. “Hospitals and health systems are also facing pressure from a growing number of consumer-focused competitors who are raising the bar on experience before, during, and after episodes of care.”
The goal, according to Egan, is to not only meet—but exceed—consumer expectations. For this, “executives will need to think holistically about improving patients’ experience with their system, from the moment they search for a provider to the point at which they ultimately pay their bill,” she says.
SHORT-TERM HEALTH PLANS ALLOWED UP TO 3 YEARS
https://www.healthleadersmedia.com/finance/short-term-health-plans-allowed-3-years
A final rule expands access to non-ACA-compliant plans, which the Trump administration has touted as cheaper alternatives to full coverage.
KEY TAKEAWAYS
Only about 200,000 people are expected to exit the ACA exchange market as a result of the final rule.
Gross premiums for marketplace plans are expected to rise 1% next year attributable to this policy change.
The administration notes that ‘these products are not for everyone,’ so buyers should review their options carefully.
Beginning this fall, consumers will be allowed to buy short-term limited-duration health plans renewable for up to three years, the Trump administration announced Wednesday morning with a newly finalized rule.
The policy change expands access to lower-grade coverage options the Obama administration had restricted to three months, without a renewal option, in light of the Affordable Care Act. The looser rules finalized Wednesday allow terms up to 12 months, renewable up to 36 months.
While critics contend the short-term options will pull younger healthier beneficiaries out of ACA-compliant exchange plans, driving up premiums for sicker populations left behind, the administration says any negative effects will be minimal and outweighed by the market benefits of having more options.
James Parker, MBA, a former Anthem executive who serves as director of the Health and Human Services Office of Health Reform and as one of four key senior advisors to HHS Secretary Alex Azar, said the administration doesn’t expect a mass exodus from the ACA exchanges to these short-term options.
“What we do believe, however, is that there will be significant interest in these policies from individuals who today are not in the exchange and, in many cases, have been priced out of coverage as insurance premiums have significantly increased over the past four to five years,” Parker said during a call with reporters Tuesday evening.
Randy Pate, a deputy administrator of the Centers for Medicare & Medicaid Services who oversees individual and small-group markets as director of the Center for Consumer Information and Insurance Oversight, said the administration expects about 600,000 people to enroll in the short-term plans next year as a result of the expanded access. Only an estimated 200,000 will leave the exchange market as a result of the final rule, he said.
This shift is expected to increase gross premiums for marketplace plans by 1% next year, with net premiums decreasing by 6%, Pate said during the call.
- The wrong direction? When the administration announced its plans earlier this year to expand access to short-term coverage options, American Hospital Association President and CEO Rick Pollack called it “a step in the wrong direction for patients and health care providers.” If consumers are unaware of the limits on their skimpy coverage, it could ultimately drive bad debt for hospitals, he said.
- Disclosure requirements beefed up: The final rule includes additional language to make sure consumers know what they are buying, Pate said. “We fully recognize these products are not necessarily for everyone, but we do think they will provide an affordable option to many, many people who have been priced out of the current market under the Obamacare regulation,” he said.
- There’s an opportunity for insurers. As consumers gain interest in their short-term options, insurers will have an opportunity to meet the rising demand. “The impact is going to vary depending on the insurer, whether this is a business they have been in in the past and whether they have been longing to get back into it when consumer interest reached an acceptable level,” Christopher Holt, director of healthcare policy with D.C.-based think tank American Action Forum, told HealthLeaders Media. “There also could be some who see it as a new opportunity to claim a share of the marketplace they’re not reaching.”
- But insurers have some skepticism. Matt Eyles, president and CEO of America’s Health Insurance Plans, wrote a letter to HHS in April. “We are concerned that substantially expanding access to short-term, limited duration insurance will negatively impact conditions in the individual health insurance market, exacerbating problems with access to affordable comprehensive coverage for all individual market consumers,” Eyles wrote.
- Trump administration boosters: Beyond simply opening a door to longer short-term plans, the Trump administration has touted these and other non-ACA-compliant options as viable rescue mechanisms for individuals squeezed by rising premiums. Navigators, who have been tasked in past years with helping people sign up for exchange coverage, will now be encouragedto provide information on short-term and association health plans as well.
- States can block: The final rule released Wednesday addresses the federal government’s definition of short-term limited-duration health insurance, but states retain the authority to impose stricter regulations, Pate said. They can limit or even ban the plans altogether.
While lawmakers seem to have backburnered their aspirations for broad healthcare reform in the near-term, Parker said the administration will continue taking incremental steps to improve affordability of coverage.
Reinsurance in Wisconsin expected to stabilize individual market
Under the Wisconsin Health Care Stability Plan, the state pays for 50 percent of the cost of claims between $50,000 and $250,000.
Wisconsin has received a federal waiver to leverage $200 million to implement a state-based reinsurance program to cover high-cost claims in the individual health insurance market.
Reinsurance covers a portion of the most expensive claims. The move helps to stabilize the individual market by reducing insurer claim costs and decreasing premiums.
Insurers don’t have the uncertainty that a small number of high-risk individuals could dramatically increase their expenses because there aren’t enough healthy consumers to balance out the risk pool.
Under the Wisconsin Health Care Stability Plan, the state pays for 50 percent of the cost of claims between $50,000 and $250,000.
The Department of Health and Human Services and the Department of the Treasury on Sunday approved the 1332 state innovation waiver under the Affordable Care Act. The five-year program starts Jan. 1, 2019 and ends Dec. 21, 2023.
The approved waiver allows the state to have access to $200 million in reinsurance funding. The federal government will pay an estimated $166 million and the state, $34 million.
The program is budget neutral to the federal government. The money comes from savings from premium tax credits. The federal waiver allows the premium tax credits to be passed through to the state, rather than going directly to the consumer.
Consumers will see the savings in an expected 3.5 percent drop in their premiums in the individual market, starting in 2019, according to a released statement from the Centers for Medicare and Medicaid Services and Wisconsin Governor Scott Walker. This compares to a 44 percent rate hike on premiums in 2018.
Walker submitted the waiver request for the state’s Health Care Stability Plan in April.
In an unrelated waiver request, Wisconsin has asked to impose work requirements as a condition of Medicaid beneficiaries receiving coverage.
While CMS Administrator Seema Verma and HHS Secretary Alex Azar have reportedly said that a judge’s decision in Kentucky barring work requirements will not stop the Trump administration from considering similar waivers, Wisconsin’s request awaits federal approval.
Last month, a federal judge blocked Kentucky’s plan to implement a work requirement waiver. In light of the action, CMS decided to reopen Kentucky’s 30-day federal public comment through August 18.
HENRY KOTULA 