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Illinois hospitals’ financial struggles likely to continue into 2018
http://www.chicagotribune.com/business/ct-biz-hospital-financial-struggles-20171215-story.html
he list reads like a who’s who of hospital systems in the Chicago area: Advocate Health Care, Edward-Elmhurst Health, Centegra Health System.
But it’s a list of hospitals systems that cut jobs this year to deal with financial pressures — not a list any hospital is eager to join.
Hospitals in Illinois and across the country faced financial stresses this year and are likely to continue feeling the squeeze into 2018 and beyond, experts say. Those pressures could fuel more cuts, consolidation and changes to patient care and services.
“We have many hospitals doing their best just to survive,” said A.J. Wilhelmi, president and CEO of the Illinois Health and Hospital Association.
Moody’s Investors Service recently downgraded its outlook for not-for-profit health care and public health care nationally from stable to negative, with the expectation that operating cash flow will fall by 2 percent to 4 percent over the next 12-18 months. About three-fourths of Illinois hospitals are not-for-profit.
“(For) almost every hospital and health system we talk to, (financial pressure) is at the top of their list in terms of ongoing issues,” said Michael Evangelides, a principal at Deloitte Consulting.
A number of factors are to blame.
Leaders of Illinois systems say reimbursements from government insurance programs, such as Medicaid and Medicare, don’t cover the full cost of care. And with baby boomers growing older, many hospitals’ Medicare populations are on the rise. It doesn’t help that payments to hospitals from the state were delayed amid Illinois’ recently resolved, two-year budget impasse, Wilhelmi said.
Unpaid medical bills, known as bad debt, are also increasing as more patients find themselves responsible for large deductibles. Payments from private insurers are no longer helping hospitals as much as they once did. Though those payments tend to be higher than reimbursements from Medicare and Medicaid, they’re not growing as fast as they used to, said Daniel Steingart, a vice president at Moody’s.
Growing expenses, such as for drugs and information technology services, also are driving hospitals’ financial woes. And hospitals are spending vast sums on electronic medical record systems and cybersecurity, Steingart said.
Many also expect that the new federal tax bill, passed Wednesday, may further strain hospital budgets in the future. That bill will do away with the penalty for not having health insurance, starting in 2019. Hospital leaders worry that change will lead to more uninsured people who have trouble paying hospital bills and wait until their conditions become dire and complex before seeking care.
With so much going on, it can be tough for hospitals to meet revenue goals.
“You’re talking about a phenomenon taking place across the country,” said Advocate President and CEO Jim Skogsbergh. Advocate announced in May that it planned to make $200 million in cuts after failing to meet revenue targets. In March, Advocate walked away from a planned merger with NorthShore University HealthSystem after a federal judge sided with the Federal Trade Commission, which had challenged the deal. Advocate is now hoping to merge with Wisconsin health care giant Aurora Health Care, although the hospital systems say financial issues aren’t driving the deal.
“Everybody is seeing declining revenues, and margins are being squeezed. It’s a very challenging time,” Skogsbergh said.
Hospitals in Illinois have responded to the pressures in a number of ways, including with job reductions. Advocate laid off about 75 workers in the fall; Centegra announced plans in September to eliminate 131 jobs and outsource another 230; and Edward-Elmhurst laid off 84 employees, eliminating 234 positions in all, mostly by not filling vacant spots.
Hospitals also are changing some of the services they offer patients and delaying technology improvements, said the Illinois hospital association’s Wilhelmi.
Centegra Hospital-Woodstock earlier this year stopped admitting most overnight patients, one of a number of changes meant to save money and increase efficiency. As a result, the system “achieved our goal of keeping much-needed services in our community,” spokeswoman Michelle Green said in a statement.
Many Illinois hospitals have also cut inpatient pediatric services, citing weak demand, and are instead investing in outpatient services.
The challenge is saving money while improving care and patient outcomes, said Evangelides of Deloitte. Hospitals are striving to do both at the same time.
Advocate, for example, opened its AdvocateCare Center in 2016 on the city’s South Side to treat Medicare patients with multiple chronic illnesses and conditions. The clinic offers doctors, pharmacists, physical therapists, social workers and exercise psychologists. It has helped reduce hospital admissions and visits among its patients, said Dr. Lee Sacks, Advocate executive vice president and chief medical officer.
Advocate didn’t open the clinic primarily to help its bottom line. The goal was to improve patient care while also potentially reducing some costs.
But such moves are becoming increasingly important to hospitals.
“It really does impact everyone,” Evangelides said of the financial pressures facing hospitals. “We all have a giant stake in helping and hoping that the systems across the country … can ultimately survive and thrive.”
Infection Lapses Rampant In Nursing Homes But Punishment Is Rare
https://khn.org/news/infection-lapses-rampant-in-nursing-homes-but-punishment-is-rare/
A Kaiser Health News analysis of federal inspection records shows that nursing home inspectors labeled mistakes in infection control as serious for only 161 of the 12,056 homes they have cited since 2014.
Basic steps to prevent infections — such as washing hands, isolating contagious patients and keeping ill nurses and aides from coming to work — are routinely ignored in the nation’s nursing homes, endangering residents and spreading hazardous germs.
A Kaiser Health News analysis of four years of federal inspection records shows 74 percent of nursing homes have been cited for lapses in infection control — more than for any other type of health violation. In California, health inspectors have cited all but 133 of the state’s 1,251 homes.
Although repeat citations are common, disciplinary action such as fines is rare: Nationwide, only one of 75 homes found deficient in those four years has received a high-level citation that can result in a financial penalty, the analysis found.
“The facilities are getting the message that they don’t have to do anything,” said Michael Connors of California Advocates for Nursing Home Reform, a nonprofit in San Francisco. “They’re giving them low-level warnings year after year after year and the facilities have learned to ignore them.”
Infections, many avoidable, cause a quarter of the medical injuries Medicare beneficiaries experience in nursing homes, according to a federal report. They are among the most frequent reasons residents are sent back to the hospital. By one government estimate, health care-associated infections may result in as many as 380,000 deaths each year.
The spread of methicillin-resistant Staphylococcus aureus (MRSA) and other antibiotic-resistant germs has become a major public health issue. While Medicare has begun penalizing hospitals for high rates of certain infections, there has been no similar crackdown on nursing homes.
As average hospital stays have shortened from 7.3 days in 1980 to 4.5 days in 2012, patients who a generation ago would have fully recuperated in hospitals now frequently conclude their recoveries in nursing homes. Weaker and thus more susceptible to infections, some need ventilators to help them breathe and have surgical wounds that are still healing, two conditions in which infections are more likely.
“You’ve got this influx of vulnerable patients but the staffing models are still geared more to the traditional long-stay resident,” said Dr. Nimalie Stone, the CDC’s medical epidemiologist for long-term care. “The kind of care is so much more complicated that facilities need to consider higher staffing.”
The Centers for Medicare & Medicaid Services (CMS), which oversees inspections, has recognized that many nursing homes need to do more to combat contagious bugs. CMS last year required long-term care facilities to put in place better systems to prevent infections, detect outbreaks early on and limit unnecessary use of antibiotics through a stewardship program.
But the agency does not believe it has skimped on penalties. CMS said in a statement that most infection-control violations have not justified fines because they did not put residents in certain danger. For instance, if an inspector observed a nurse not washing his or her hands while caring for a resident, the agency said that would warrant a lower-level citation “unless there was an actual negative resident outcome, or there was likelihood of a serious resident outcome.”
AP-NORC Poll: Health Care Is the Issue That Won’t Go Away
https://www.nytimes.com/aponline/2017/12/21/us/politics/ap-us-ap-poll-health-care.html
As President Donald Trump completes his first year in office, Americans are increasingly concerned about health care, and their faith that government can fix it has fallen.
A new poll by The Associated Press-NORC Center for Public Affairs Research finds that 48 percent named health care as a top problem for the government to focus on in the next year, up 17 points in the last two years.
The poll allows Americans to name up to five priorities and found a wide range of top concerns, including taxes, immigration and the environment. But aside from health care, no single issue was named by more than 31 percent.
And 7 in 10 of those who named health care as a top problem said they had little to no confidence that government can improve matters. The public was less pessimistic in last year’s edition of the poll, when just over half said they lacked confidence in the problem-solving ability of lawmakers and government institutions.
“We are way up there on the cost, and as far as giving good health care, we are way down,” said Rebekah Bustamante of San Antonio, a retired medical imaging technician. “Now in health care, you’re a number.”
Bustamante said she voted for Trump, but “he’s learning on the job, and he’s got a long way to go.”
Trump initially promised his own plan that would deliver “insurance for everybody” and “great” health care, “much less expensive and much better.” But the White House never released a health care proposal from the president.
GOP legislation to repeal and replace former President Barack Obama’s health care law failed in Congress, although the tax bill scraps the Obama requirement that most people get health insurance. Bloodied on both sides, Republicans and Democrats seem to have battled to an uneasy draw on health care.
Meanwhile, conflicting policy signals from Washington, including an abrupt White House decision to cancel insurer subsidies, roiled insurance markets. Premiums on health plans purchased by individuals jumped by double digits. Progress reducing the number of uninsured stalled, and one major survey found an uptick this year.
“There is zero bipartisanship, and it’s frustrating,” said Eric Staab, a high school teacher from Topeka, Kansas. “It seems like we have thrown everything at this dartboard, and nothing is improving the coverage.”
Rumblings of discontent have political repercussions for next year’s midterm elections and the presidential contest in 2020, said Robert Blendon, a professor at the Harvard T.H. Chan School of Public Health, who follows opinion trends on health care.
“It’s the issue that won’t go away,” said Blendon. “Given the news cycle, taxes should be first, the economy should be second, and this health care thing should be buried.”
Three in 10 Americans listed taxes among their top priorities, about double the percentage who said that last year. About a quarter mentioned immigration, and just under 2 in 10 mentioned environmental issues and education. Meanwhile, concerns about unemployment plunged to 14 percent, about half the mentions as last year.
Health care was by far the top issue mentioned by Democrats and independents. Republicans were about equally likely to mention immigration, health care and taxes.
Democrats were more likely than Republicans to say they have little to no confidence that the government will make progress on health care, 84 percent to 57 percent.
The reason health care doesn’t fade away is that costs aren’t getting any more manageable, said some people who took part in the AP-NORC survey.
Bustamante said she is planning a trip to Mexico for some dental work, because she can obtain quality service for much less there. “Thank God I live in Texas, where getting to Mexico isn’t that far away,” she said. “But everybody doesn’t have that option.”
ShyJuan Clemons of Merrillville, Indiana, said he’s currently uninsured because his previous health plan was costing too much money for the benefit he got from it. He faced his insurance plan’s annual deductible when he went to the doctor, so he’d wind up paying out-of-pocket for visits, on top of premiums.
“You are not constantly worried about taxes, but you are constantly worried about health care — be it major or minor,” said Clemons, a personal care attendant who works with disabled people. “You catch a cold, and you just think about it in passing — ‘I hope it doesn’t develop into a problem.'”
Clemons, a Democrat, said he’s disappointed that Trump and Republicans in Congress seem to be trying to tear down “Obamacare” instead of building on it. “I would like to see them make the thing run smoothly so we can do better, instead of just trying to cripple it,” he said.
The lack of confidence in the ability of government to find pragmatic solutions extended to other problems in the AP-NORC poll, including climate change, immigration, and terrorism.
Just 23 percent said that Trump has kept the promises he made while running for president, while 30 percent said he’s tried and failed, and 45 percent said he has not kept his promises at all.
Nearly 2 in 3 said they were pessimistic about the state of politics in the U.S. About half were downbeat about the nation’s system of government, and 55 percent said America’s best days are behind.
Despite Compressed Sign-Up Period, ACA Enrollment Nearly Matches Last Year’s
https://khn.org/news/despite-compressed-sign-up-period-aca-enrollment-nearly-matches-last-years/
A day after President Donald Trump said the Affordable Care Act “has been repealed,” officials reported that 8.8 million Americans have signed up for coverage on the federal insurance exchange in 2018 — nearly reaching 2017’s number in half the sign-up time.
That total is far from complete. Enrollment is still open in parts of seven states, including Florida and Texas, that use the federal healthcare.gov exchange but were affected by hurricanes earlier this year. The numbers released Thursday by the Department of Health and Human Services also did not include those who signed up between midnight Dec. 15 and 3 a.m. ET on Dec. 16, the final deadline for 2018 coverage, as well as those who could not finish enrolling before the deadline and left their phone number for a call back.
And enrollment has not yet closed in 11 states — including California and New York — plus Washington, D.C., that run their own insurance exchanges. Those states are expected to add several million more enrollees.
The robust numbers for sign-ups on the federal exchange — 96 percent of last year’s total — surprised both supporters and opponents of the health law, who almost universally thought the numbers would be lower. Not only was the sign-up period reduced by half, but the Trump administration dramatically cut funding for advertising and enrollment aid. Republicans in Congress spent much of the year trying to repeal and replace the law, while Trump repeatedly declared the health law dead, leading to widespread confusion.
On the other hand, a Trump decision aimed at hurting the exchanges may have backfired. When he canceled federal subsidies to help insurers offer discounts to their lowest-income customers, it produced some surprising bargains for those who qualify for federal premium help. That may have boosted enrollment.
“Enrollment defied expectations and the Trump administration’s efforts to undermine it,” said Lori Lodes, a former Obama administration health official who joined with other Obama alumni to try to promote enrollment in the absence of federal outreach efforts. “The demand for affordable coverage speaks volumes — proving, yet again, the staying power of the marketplaces.”
“The ACA is not repealed and not going away,” tweeted Andy Slavitt, who oversaw the ACA under President Barack Obama.
The tax bill passed by Congress this week repeals the fines for those who fail to obtain health coverage, but those fines do not go away until 2019. Still, that has added to the confusion for 2018 coverage.
And it remains unclear whether Congress will make another attempt to repeal the law in 2018.
“I think we’ll probably move on to other issues,” Senate Majority Leader Mitch McConnell (R-Ky.) said in an interview Friday with NPR.
Children’s Health Insurance Program Still in Limbo After Yet Another Patch
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States running out of money after failure to reauthorize CHIP
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Bill provides $2.85 billion meant to last through March
A critical government program that provides health-care coverage to 9 million low-income kids received yet another patch to help stretch it out a few more months — with still no long-term fix in sight.
Congress passed short-term legislation Thursday night that includes $2.85 billion to help fund the program, known as CHIP, through the end of March. The measure will help cover the estimated 1.9 million children across 24 states and Washington, D.C., that stood to lose coverage for care such as doctors visits and hospitalizations in January as states have dipped into reserve funds. But the temporary relief still leaves CHIP and families that rely on it in a state of uncertainty.
“You can’t run an insurance program this way,” said Sara Rosenbaum, a professor at the Milken Institute School of Public Health at George Washington University. Lawmakers are forcing health officials who run the program “to go month-to-month.”
Funding for the Children’s Health Insurance Program lapsed at the end of September when lawmakers couldn’t reach agreement on a five-year reauthorization of the program. They’ve since failed to come up with a solution and instead passed short-term fixes — even though CHIP is one of the few programs that enjoys bipartisan support. Both Republicans and Democrats have disagreed on how to pay for a full reauthorization.
“We share a commitment to extend full funding for CHIP as soon as possible,” Senate Finance Committee Chairman Orrin Hatch, a Republican, and Senator Ron Wyden, the top Democrat on the committee, said in a joint statement.
The spending legislation passed Thursday is part of a last-ditch proposal that keeps the government open through Jan. 19 while a longer-term budget solution is worked out. Both the House and Senate approved the spending measure before government-wide funding expired Friday.
Hard on Families
CHIP, created in 1997, is a shared federal-state program for children of parents who can’t afford private insurance but make too much to qualify for the Medicaid government program for the poor. States have broad discretion in setting eligibility, and have the option to cover pregnant women as well.
Funding for CHIP — which also covers dental care and prescriptions, among other services — amounts to almost $16 billion, with more than 90 percent coming from the federal government.
Even with passage of another patch, the limbo is hard on families.
“It’s a pretty bad Christmas or holiday present for a lot of families,” said Diane Rowland, executive vice president of the Kaiser Family Foundation, a bipartisan nonprofit focused on national health issues. “You can predict that there will be relief that the funding has been extended, but it will be combined with a lot of anxiety.”
As for states that can’t plan ahead, “this is creating an administrative nightmare,” Rowland said.
States have to start preparing for a possible shutdown of the program well before the day comes when they run out of money.
‘Stress and Turmoil’
“This whole situation is causing chaos,” said Cathy Caldwell, director of the bureau of Children’s Health Insurance with the Alabama department of public health. “We are causing confusion to families, stress and turmoil.”
Alabama health officials were forced to warn on Dec. 15 they would stop taking new enrollees on New Year’s Day and that the 84,000 children currently in the program could lose coverage Feb. 1.
Democrats have opposed a House GOP proposal to reauthorize CHIP for five years because it would be paid for by taking money from a fund set up under Obamacare to invest in prevention efforts. Bipartisan talks with the Senate and the White House on other funding offsets are “well down the road,” said House Minority Leader Nancy Pelosi, a California Democrat.
Penn State Health, Highmark Health sign $1B value-based care network deal
Penn State Health and Highmark Health have inked a $1 billion deal to form a value-based community care network that aims to improve population health and protect market share by keeping more patients in the region, especially for complex care.
Anchored by the Milton S. Hershey Medical Center, the plan also calls for collaboration with community physicians and will include new facilities and co-branded health insurance products.
The move doesn’t affect existing agreements: Penn State Health can still partner with other health insurance companies, and Highmark will continue to partner with other providers.
“Penn State Health will offer more primary, specialty and acute care locations across central Pennsylvania so that [patients] will have easier access to our care, right in the communities where they live,” A. Craig Hillemeier, CEO of Penn State Health, said in an announcement. “Our two organizations share the belief that people facing life-changing diagnoses should be able to get the care they need as close to home as possible.”
Highmark Health will join Penn State as a member of Penn State Health with a minority interest. The payer will get up to three seats on the 15-member board of directors.
“We want to collaborate with forward-thinking partners who, like us, are committed to creating a positive healthcare experience for members and patients,” Highmark Health CEO David Holmberg said in the announcement.
Value-based care and population health continue to drive deals such as this one, including in the competitive Pennsylvania market. Earlier this year, PinnacleHealth announced that it would partner with the University of Pittsburgh Medical Center, the state’s largest integrated health system, and also agreed to acquire four Central Pennsylvania hospitals from Community Health Systems.
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Cartoon – The Spin Doctor
HENRY KOTULA 