Category Archives: Uncategorized

Healthcare CEO pay climbs steadily since ACA passage

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http://www.healthcaredive.com/news/healthcare-ceo-pay-climbs-steadily-since-aca-passage/447772/

Dive Brief:

  • Earnings of healthcare CEOs have continued to grow under the Affordable Care Act (ACA) and the pay packages give them little incentive to rein in spending, a new Axios analysis concludes.
  • Since the ACA was passed in 2010, CEOs of the 70 largest healthcare companies have cumulatively earned a whopping $9.8 billion — or almost 11% more money on average each year. However, because most of the pay is in vested stock, CEOs often base decisionmaking on what boosts stock prices (e.g., bigger sales, more tests and procedures) and not the ACA goals of patient-centered, value-based care.
  • The analysis was based on financial reports from 70 publicly traded U.S. healthcare companies comprising more than $2 trillion in annual revenues. Not-for-profit hospital CEOs were not included.

Dive Insight:

The biggest payout — $863 million — went to John Martin, CEO of biotechnology company Gilead Sciences, according to the analysis. Other takeaways include:

  • Just four of the 113 healthcare CEOs in the analysis were women
  • 11 of the top 20 top earners were CEOs of pharma and drug-related companies;
  • CEOs earned a little less as a whole last year versus 2015 due to market uncertainty over the presidential election.

Rising salaries are drawing increased scrutiny and some pushback. In April, North Carolina lawmakers approved a bill that would bar compensation for CEOs of behavioral health managed care organizations from exceeding by more than 30% the average salary of other behavioral health managed care businesses in the state. The bill seemed targeted at Cardinal Healthcare Innovations CEO Richard Topping, whose salary was $435,000 more than the average salary for a managed care organization in the state.

Salaries of executives at nonprofit organizations have also been growing. According to a Wall Street Journal report in March, many nonprofits are embracing salary strategies used in the for-profit world and offering packages totaling more than $1 million, with possibility of bonuses and deferred payments. In 2014, about 75% of nonprofit pay packages totaling $1 million or more went to healthcare executives.

In Massachusetts, in fact, pay for hospital CEOs outpaced state health spending. The largest compensation package went to Elizabeth Nabel, president of Brigham and Women’s Hospital, who received $5.4 million in 2014, up 119% from the previous year. By contrast, overall healthcare spending in Massachusetts rose 4.8% that year.

In an analysis earlier this year, Axios found that Sutter Health CEO Patrick Fry gets paid the most per patient stay ($6.88 a day) among the 20 largest hospital systems. Greenwich Hospital CEO Norman Roth earned the most ($56.40 a day) among other studied hospitals.

https://www.axios.com/the-sky-high-pay-of-health-care-ceos-2442398819.html

 

The Medicaid Fund: Beware of Gifts

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http://thenews.pl/1/11/Artykul/317380,Poland-to-open-new-museum-at-German-Nazi-Treblinka-death-camp

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Press reports have suggested that to get the Affordable Care Act repeal-and-replace effort back on track, Senate leaders are now offering, as part of their Better Care Reconciliation Act (BCRA), a $200 billion fund to help states partially offset the nearly $800 billion dollars in lost federal Medicaid funding they would face over the next decade if BCRA became law. This fund, to be administered by the U.S. Secretary of Health and Human Services (HHS), would apparently be used to help low-income people transition from Medicaid to private insurance.

The offer, if accurate, still amounts to a 75 percent reduction in funding. So the fund does little to address the human and financial consequences of BCRA’s original Medicaid cuts. It’s also unclear how it would work or affect the private insurance market. Furthermore, it’s uncertain whether the Senate parliamentarian would allow a new program. Even if permitted under the strict rules governing the Senate reconciliation process, the program would encounter major legal and operational hurdles in implementation, as well as questions about the lack of public accountability for drawing on the money. It is also worth noting that this type of strategy, in which the HHS secretary is given vast powers over how to allocate funds under the loose rubric of “transition,” may itself raise questions about whether Congress simply has thrown a handful of dollars at the problem, and coupled these dollars with an extraordinary delegation of its constitutional legislative powers to the executive branch.

Today, if a state chooses to insure a Medicaid-eligible population, the federal government will pay a percentage of actual costs. Like insurance generally, these costs can vary by the type of population insured (healthy people versus those who are sick), the amount and intensity of services furnished, and the prices paid. In any year, and in any state, costs vary enormously, a fact driven home by the economic fallout from the opioid epidemic or the Zika virus. The federal Medicaid contribution to state programs ranges from 50 percent to about 75 percent, with higher contributions for low-income adults covered under the ACA’s Medicaid expansion. Equally importantly, there is real accountability in federal Medicaid payments spent to insure people — we know how many people are covered and what services are paid for.

Over the past several weeks, a blizzard of analyses and reports has made clear just how essential Medicaid is to states, their populations, their economies, and their ability to maintain operational health care systems for everyone. Receiving 25 cents on the dollar in lieu of guaranteed Medicaid financing would be little consolation; this is particularly true since presumably, like other special payments to states under the bill, the fund can be expected to be time-limited, after which more action from Congress would be needed to extend its life.

Let’s imagine that this fund becomes law, with details to be hashed out later. A host of questions would arise, all of which would need to be translated into complex and contentious regulations, issued following a lengthy rulemaking process. For example, will normal federal matching rules apply when states draw on this fund, or will states have to put up more funding or perhaps none at all? What types of costs will be recognized as eligible for fund payments? Will all states be able to participate or just those losing expansion funding? Will states be permitted to help only selected Medicaid expansion beneficiaries losing coverage? Although the fund is billed as transitional assistance for beneficiaries, would this include direct payments to providers to allow for continuity of care? Under laws that govern agency policymaking and spending decisions such as when, where, and how to spend $200 billion, these questions and many more would need to move a formal policy development process. The HHS secretary cannot simply dole out unstructured funding that could be used for purposes only tangentially related to transitions.

No vague promises or pennies-on-the-dollar slush fund can take the place of what Medicaid does for people and for states. Nor can it compensate for the consequences of ending the compact on which Medicaid has rested for over 50 years.

Parliamentarian deals setback to GOP repeal bill

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http://thehill.com/policy/healthcare/343234-parliamentarian-deals-setback-to-gop-healthcare-bill?utm_content=buffer1343d&utm_medium=social&utm_source=facebook.com&utm_campaign=buffer

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Major portions of the Republican bill to repeal and replace ObamaCare will require 60 votes, according to the Senate parliamentarian, meaning they are unlikely to survive on the floor.

The parliamentarian has advised senators that several parts of the bill could be stripped out, according to a document released Friday by Sen. Bernie Sanders (I-Vt.), ranking member of the Senate Budget Committee. (Read the guidance here.)

The provisions that would likely be removed include policies important to conservatives, such as restrictions on tax credits being used for insurance plans that cover abortion.

Language in the bill defunding Planned Parenthood for a year also violates budget rules, according to the parliamentarian. That guidance is sure to anger anti-abortion groups who backed the bill specifically because of those provisions.

In a statement, Planned Parenthood said it was “obvious” that the defunding provision would be a violation of the reconciliation rules.

“No amount of legislative sleight of hand will change the fact that the primary motivation here is to pursue a social agenda by targeting Planned Parenthood,” the group said.

The parliamentarian has also not yet ruled on a controversial amendment from Sen. Ted Cruz (R-Texas) that would allow insurers to sell plans that do not meet ObamaCare regulations. If that provision were struck, conservative support for the bill would be in doubt.

Republicans are trying to use the budget reconciliation process to pass their healthcare bill with only a simple majority. The provisions deemed impermissible under that process can be stripped if a senator on the floor raises an objection.

Democrats would be virtually certain to deny Republicans the 60 votes they would need to keep portions of the bill intact.

The result is that the arcane rules of the Senate could end up making the bill harder for Senate Majority Leader Mitch McConnell (R-Ky.) to pass.

A spokesman for McConnell was quick to point out that the parliamentarian only provides guidance on the legislation to help inform subsequent drafts. The bill will have to change before it gets to the floor if Republicans want to salvage any of provisions in question.

GOP leaders have said they want to vote on a procedural motion to begin debate on ObamaCare repeal legislation early next week. However, it’s still not clear if they have the votes or which legislation they will be voting on: the replacement bill or repeal-only legislation.

Some conservatives were already questioning Friday why the Senate parliamentarian, Elizabeth MacDonough, would rule against Planned Parenthood defunding, when that provision was allowed under reconciliation in 2015.

A spokesman for Sanders said the guidance has changed because it is now clear that Planned Parenthood would be the only organization affected by the defunding language.

“It passed last time because there was at least a question that other entities could be affected by the language,” the spokesman said. “In the interim, Republicans have not been able to show that any entity other than Planned Parenthood is affected, and the new [Congressional Budget Office] score confirms that.”

In a blow to the insurance industry, the parliamentarian has advised that two key market stabilization provisions in the bill would be against the rules. First, the legislation can’t appropriate the cost-sharing reduction subsidies insurers rely on to keep premiums and deductibles low; it can only repeal them.

Additionally, a “lockout” provision requiring consumers with a break in coverage to wait six months before buying insurance also violates the rules, according to the guidance.

The provision was added to the bill to address concerns that people would only sign up for health insurance when they’re sick, if insurers are still prevented from denying coverage for pre-existing conditions.

The parliamentarian also advised that a specific provision dealing with New York state’s Medicaid program would be a violation of the rules. Senate Minority Leader Charles Schumer (D-N.Y.) seized on that decision.

“The parliamentarian made clear that state-specific provisions” violate the rules, Schumer said. “This will greatly tie the majority leader’s hands as he tries to win over reluctant Republicans with state-specific provisions. We will challenge every one of them.”

7 recent hospital, health system outlook and credit rating actions

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http://www.beckershospitalreview.com/finance/7-recent-hospital-health-system-outlook-and-credit-rating-actions.html

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The following hospital and health system rating and outlook changes and affirmations took place in the last week, beginning with the most recent.

1. Moody’s affirms ‘A1’ rating on Munson Healthcare
Moody’s Investors Service affirmed the “A1” rating on Traverse City, Mich.-based Munson Healthcare’s revenue bonds issued by the Grand Traverse County Hospital Authority, affecting $155 million of debt.

2. S&P downgrades North Broward Hospital District’s bond rating to ‘BBB+’
S&P Global Ratings downgraded the rating on Fort Lauderdale, Fla.-based Broward Hospital District’s series 2005A, 2007 and 2008A variable-rate revenue bonds to “BBB+” from “A-.”

3. Fitch affirms ‘AA-‘ on SCL Health’s revenue bonds
Fitch Ratings affirmed the “AA-” rating on Broomfield, Colo.-based SCL Health’s revenue bonds issued by the Colorado Health Facilities Authority, Kansas Development Finance Authority and Montana Facility Finance Authority, affecting $1.3 billion of outstanding debt.

4. Moody’s revises Agnesian HealthCare’s outlook to negative
Moody’s Investors Service assigned its “A2” rating to Fond du Lac, Wis.-based Agnesian HealthCare’s proposed $58 million series 2017 revenue bonds to be issued by the Wisconsin Health and Educational Facilities Authority. The expected sale date is July 27.

5. Fitch affirms ‘BBB’ rating on Methodist Hospitals’ revenue bonds
Fitch Ratings affirmed its “BBB” rating on Gary, Ind.-based The Methodist Hospitals’ series 2014A revenue refunding bonds issued by the Indiana Finance Authority.

6. Fitch affirms ‘AA’ rating on Texas Children’s Hospital’s
Fitch Ratings affirmed the “AA” rating on a number of Houston-based Texas Children’s Hospital’s revenue bonds, including series 2015-1, series 2015-3, series 2015-4, series 2010, series 2009 and series 2008-2, all issued by the Harris County Cultural Education Facilities Finance Corp. These rating actions affect a total of $683 million of debt.

7. Moody’s affirms ‘Baa1’ rating on Cooper Health System
Moody’s Investors Service affirmed its “Baa1” rating on Camden, N.J.-based Cooper Health System’s revenue bonds issued by the Camden County Improvement Authority and New Jersey Economic Development Authority, affecting $240 million of outstanding debt.

ACOs are leaving $886M in net payments on the table, analysis finds

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http://www.beckershospitalreview.com/accountable-care-organizations/acos-are-leaving-886m-in-net-payments-on-the-table-analysis-finds.html

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ACOs in Track 1 of the Medicare Shared Savings Program are losing out on millions of dollars in additional net payments from CMS by not taking on more risk and missing out on the Quality Payment Program’s 5 percent lump sum bonus payment for ACOs in Track 2 and 3, according to an analysis from Avalere.

The analysis simulates how much Track 1 ACOs would earn if they were enrolled in Track 2 — based on 2015 performance — and the QPP was in place. Track 1 ACOs do not bear downside financial risk, and therefore share in a smaller portion of savings than their Track 2 and 3 counterparts. However, if these ACOs had taken on more risk in 2015, they would have earned $178 million more in shared savings, according to the analysis. And if the Track 1 ACOs took on downside risk, they would qualify as an Advanced Alternative Payment Model under the Medicare Access and CHIP Reauthorization Act’s QPP. These models have the opportunity to earn a bonus up to 5 percent on Medicare Part B expenditures — and based on 2015 performance, those ACOs would be leaving $1.1 billion in AAPM bonus payments on the table by not bearing the downside risk necessary to qualify, according to the report.

“The CMS’ new value-based payment incentives really tip the scales for doctors to assume greater financial risk,” Josh Seidman, PhD, senior vice president at Avalere, said in a statement. “For those physicians who were dipping their toes in the water with low-risk ACO models, the incentives now make it advantageous for a majority of them to move more aggressively into greater accountability for population health.”

Of course, some of the ACOs would have also generated net losses. The analysis indicates some of the ACOs in the simulation would have had to pay back CMS for spending above the benchmark. These shared losses would have totaled $437 million. Benefits and losses taken together, if all Track 1 ACOs joined Track 2 of the MSSP and performed as well as they did in 2015, they would earn additional net payments of $886 million, according to the analysis.

However, the majority of ACOs would still benefit by joining Track 2. Avalere found 79 percent, or 307 of the Track 1 ACOs, would have financially benefitted, compared to 21 percent, or 82, that would not.

This year 486 ACOs are participating in Track 1, accounting for most of the MSSP program. Track 2 counts just six participants and Track 3 has 36 ACOs.

Adventist Health closes Washington hospital

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http://www.beckershospitalreview.com/finance/adventist-health-closes-washington-hospital.html

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Roseville, Calif.-based Adventist Health on Monday closed Walla Walla (Wash.) General Hospital along with its affiliated home health division and medical group.

The closure comes after Adventist called off plans in June to transfer ownership of Walla Walla General to Renton, Wash.-based Providence Health & Services. Under the deal, Providence agreed to assume ownership and operation of the Walla Walla campus and disburse $14 million over 24 years into a special fund for community health that Adventist would direct.

However, Adventist said late last month the proposed transaction encountered “unexpected regulatory challenges” that could possibly block the deal. The system discontinued negotiations with Providence and announced it would close the Walla Walla campus.

Adventist said Walla Walla General has faced financial troubles for the past decade. The system invested $68 million into Walla Walla General in recent years, but that wasn’t enough to save the hospital.

“We respect the legacy of this hospital, its place in the heart of our community, and the investments we have all made to sustain it for more than a century,” Adventist said. “Unfortunately, the current volatile healthcare environment, legislative challenges, and consistent low inpatient census have created an unsustainable future for Walla Walla General Hospital.”

Adventist said many of the Walla Walla General Hospital physicians will remain local and will inform patients of their future plans.

Walla Walla General Hospital was founded in 1899 and has more than 400 employees, including a medical staff of more than 175 clinicians.