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Washington is under a state of emergency as measles cases rise
As of Sunday, there are 35 confirmed cases of measles in the state of Washington — an outbreak that has already prompted Gov. Jay Inslee to declare a state of emergency.
“Measles is a highly contagious infectious disease that can be fatal in small children,” Inslee said in his proclamation on Friday, adding that these cases create “an extreme public health risk that may quickly spread to other counties.”
There were 34 cases of the measles in Clark County, which sits on the state’s southern border, just across the Columbia River from Portland, Oregon. Officials said 30 of the cases involved people who have not had a measles immunization; the other four are not verified. Of the 34 cases, 24 are children between age 1 and 10. There are also nine suspected cases in Clark County.
There is also one case in King County, which includes Seattle. While the King County website says the patient, a man in his 50s, is a “suspected case,” the governor said in a news release it is a confirmed case of measles.
In a health alert from King County, it was said the man had recently traveled to Clark County.
Inslee’s proclamation allows agencies and departments to use state resources and “do everything reasonably possible to assist affected areas.”
A news release on the governor’s website says the Washington State Department of Health, or DOH, has implemented an infectious disease incident management structure so it can manage the public health aspects of the outbreak through investigations and lab testing.
The Washington Military Department, the release says, is organizing resources to assist the DOH and local officials in easing the effects on people, property and infrastructure.
Last week, a person infected with measles attended a Portland Trail Blazers home game in Oregon amid the outbreak. Contagious people also went to Portland International Airport, as well as to hospitals, schools, stores, churches and restaurants across Washington’s Clark County and the two-state region, county officials said.
Most patients with symptoms should call first
Measles is a contagious virus that spreads through the air through coughing and sneezing. Symptoms such as high fever, rash all over the body, stuffy nose and red eyes typically disappear without treatment within two or three weeks. One or two of every 1,000 children who get measles will die from complications, according to the US Centers for Disease Control and Prevention.
In 1978, the CDC set a goal to eliminate measles from the United States by 1982. Measles was declared eliminated — defined by absence of continuous disease transmission for greater than 12 months — from the United States in 2000.
But there has been a recent rise in unvaccinated children. The proportion of children receiving no vaccine doses by 2 years old rose from 0.9% among those born in 2011 to 1.3% among those born in 2015, the CDC reported in October.
The CDC recommends people get the measles, mumps and rubella vaccine to protect against those viruses. The typical recommendations are that children should get two doses of MMR vaccine, the first between 12 to 15 months of age and the second between 4 and 6 years old.
Financial worries keep hospital CEOs up at night
https://www.healthcaredive.com/news/financial-worries-keep-hospital-ceos-up-at-night/546982/
Dive Brief:
- Financial challenges, including increasing costs, shaky Medicaid reimbursement, reductions in operating costs and bad debt, ranked No. 1 on the list of hospital CEO worries in 2018, according to an American College of Healthcare Executives poll.
- Government mandates and patient safety and quality tied for second place in ACHE’s survey of top issues facing health systems. Workforce shortages came in third.
- A little more than 350 execs responded to the survey and ranked 11 concerns their facilities faced last year. Behavioral health and addiction issues, patient satisfaction, care access, physician-hospital relations, tech, population health management and company reorganization filled in the remaining slots.
Dive Insight:
No matter which cog in the healthcare system one blames for the skyrocketing costs of healthcare (big pharma inflating the list prices of drugs; hospitals for upmarking services; insurers for leaving gaps in care resulting in surprise bills) consumers’ pocketbooks aren’t the only ones affected.
A separate American Hospital Association-backed study predicted health systems will lose $218 billion in federal payments by 2028, and private payers (whose dollars would normally help hospitals make up the difference) have been curtailing reimbursements as well.
Bad debt was another fear in the ACHE report. Uncompensated care costs peaked in 2013 at $46.4 billion and, though the figures have decreased slightly since then, hospitals shelled out $38.3 billion in 2016. Wisconsin alone was on the hook for $1.1 billion in uncompensated care in fiscal year 2017.
“The survey results indicate that leaders are working to overcome challenges of balancing limited reimbursements against the rising costs of attracting and retaining talented staff to provide that care, among other things,” ACHE president and CEO Deborah Bowen said in a statement.
Other financial concerns included competition, government funding cuts, the transition to value-based care, revenue cycle management and price transparency.
And 70% of hospital CEOs were worried about shifting CMS regulations in 2018, along with regulatory/legislative uncertainty (61%) and cost of demonstrating compliance (59%) — unsurprising, given the current administration’s track record of unpredictability.
Patient safety and quality of care was also top of mind for health system CEOs, with over half of respondents anxious about the high price of medications, involving physicians in the culture of quality and safety and getting them to reduce unnecessary tests and procedures.
Also of interest was the high rank given to addressing behavioral health and addiction issues, according to Bowen, which ranked fifth in its first year of being included in the survey. The topic has been front and center in the industry of late, in line with the increasing recognition of social determinants of health and the breakdown in silos of care.
Ranking of the issues has remained largely constant since 2016, though in 2017 more hospital CEOs were concerned about personnel shortages than patient safety and quality.
2 California hospitals face closure if sale delayed
Santa Clara County (Calif.) officials criticized California Attorney General Xavier Becerra at a press conference Jan. 24 for trying to block the county’s purchase of two bankrupt hospitals, according to The Mercury News.
In December, the bankruptcy court approved Santa Clara County’s $235 million offer to buy O’Connor Hospital in San Jose and St. Louise Regional Hospital in Gilroy from El Segundo, Calif.-based Verity Health, which entered Chapter 11 bankruptcy in August. Mr. Becerra appealed the bankruptcy court’s approval of the sale earlier this month, putting the deal in jeopardy.
Mr. Becerra is seeking to halt the sale because Santa Clara County has not agreed to conditions put in place in 2015 when private hedge fund Blue Mountain Capital acquired six hospitals owned by Los Altos, Calif.-based Daughters of Charity Health System. The deal and name change to Verity were approved, subject to several conditions.
“In this case, we have the responsibility to ensure any transfer of the hospital maintains previously imposed conditions,” Mr. Becerra’s office said in an emailed statement to The Mercury News. “The conditions include the requirement to have an emergency room, inpatient facility beds, intensive care services, and NICU. The Attorney General is fighting to ensure these conditions are enforced.”
At the Jan. 24 press conference, Santa Clara County CEO Jeff Smith, MD, said Mr. Becerra cares more about maintaining “power and control” over regulations than local residents’ access to public hospitals, according to the report.
A bankruptcy court hearing on Mr. Becerra’s request to halt the sale of the hospitals is set for Jan. 30. Dr. Smith said the outcome of the hearing could determine whether the hospitals shut down.
“If that stay is granted, that will delay the process … and it is highly likely those hospitals will close,” he said, according to The Mercury News.
O’Connor Hospital and St. Louise Regional Hospital are two of the six hospitals Verity operated when it filed for bankruptcy protection. On Jan. 18, Verity announced it had received a $610 million offer for the other four hospitals.
38 hospitals sue HHS over site-neutral payment rule
Hospitals named in the suit include Vanderbilt Medical Center, Atrium Health, Rush University Medical Center, Ochsner Clinic Foundation, Montefiore.
A month and a half after several hospital advocacy groups joined together to sue the U.S. Department of Health and Human Services over it’s finalized site-neutral payment policy, 38 hospitals have followed, filing suit against HHS Secretary Alex Azar for a policy they say will deprive hospitals of hundreds of millions of dollars and could compel them to cut patient services due to loss of reimbursement.
The complaint argues that medical services provided in hospital outpatient departments are more “resource-intensive”–and therefore more costly–than those performed in an independent physician’s office. It also sharply criticized Secretary Azar, saying he “has blatantly disregarded a specific and unambiguous statutory directive, acted well beyond his authority and nullified that statutory exemption” that would have had hospital outpatient centers reimbursed for services at the higher grandfathered rate previously legislated.
The hospitals suing include Vanderbilt Medical Center, Atrium Health hospitals, Rush University Medical Center, Ochsner Clinic Foundation, Montefiore Health System and many others.
THE IMPACT
The outpatient prospective payment system seeks to equalize what physician offices and hospital outpatient departments are paid for certain clinical visits, a change that will be phased in over two years. The new rule cuts payments for hospital outpatient clinic visits at off-campus provider- based facilities in order to level them out against what is paid to physician offices. Half of the total reduction, $380 million, will take effect in 2019 and the remaining cuts will be phased the next year.
THE TREND
The Bipartisan Budget Act of 2015 amended the Social Security Act such that Medicare pays the same rates for medical services regardless of whether they are provided in a physician’s office or in an “off campus” hospital department. At the time, Congress provided an exemption from the rule for all off-campus hospital outpatient departments that were providing services before the enactment.
The AHA, in the suit they are part of, said the Azar’s reversal on the grandfathered exemption exceeds the administration’s legal authority. The AHA previously called the OPPS final rule “unsupportable analyses and erroneous policy rationales,” and said it will have “negative consequences” for patients, with those in rural and vulnerable communities getting hit especially hard. The AHA and other hospital associations are already challenging the 340B policy included in the current outpatient rule.
ON THE RECORD
“The Secretary’s unlawful rate cut directly contravenes clear congressional directives and will impose significant harm on affected off-campus hospital outpatient departments and the patients they serve. Accordingly, this Court should declare the Secretary’s Final Rule to be ultra vires and enjoin the agency from implementing any payment methodology other than OPPS rates for all E/M services provided by excepted off-campus PBDs,” the complaint states.
Mark Polston, a partner with King & Spalding, the firm representing the plaintiffs: “Our clients’ mission is to provide high-quality healthcare. They have relied for years upon their off-campus departments to expand access to care and bring hospital services directly to their communities, many of which are underserved by other providers. Congress preserved their ability to do that work when it excepted them from the changes contained in Section 603 of the Bipartisan Budget Act of 2015. But the Secretary overstepped his bounds when he took that away. We are asking the court to reinstate the decision Congress made to preserve our clients’ ability to bring the best possible care to their patients.” Mark Polston, a partner with King & Spalding, the firm representing the plaintiffs:
Walgreens settles False Claims suits for $270 million
Two cases emerged from whistleblower claims about improper billing related to discounted drug prices and insulin pens.
Pharmacy giant Walgreens will pay nearly $270 million dollars as part of two major settlements, one that alleged the company had improperly billed federal healthcare programs for insulin pens it distributed to beneficiaries who didn’t need them and another that alleged Walgreens failed to disclose and charge lower drug prices offered through a discount program.
Both settlements were approved in mid-January and unsealed Tuesday. Walgreens must pay the United States and state governments a total of $269.2 million. Both cases arose from lawsuits filed by whistleblowers under the False Claims Act. Walgreens did not admit any wrongdoing as part of either settlement.
THE IMPACT
The DOJ said as a result of the conduct alleged in both cases, federal programs were inappropriately taxed. The alleged inappropriate disbursement of insulin resulted in the waste of valuable medication and created the potential for misuse “such as the improper resale of insulin pens on the Internet.” Because the company did properly disclose its discounted drug prices, federal healthcare programs paid out higher reimbursements than were actually warranted.
MORE ON THE CASES
The first settlement resolved allegations that Walgreens improperly billed Medicare and other federal healthcare programs for “hundreds of thousands” of insulin pens dispensed to beneficiaries who didn’t need them. According to a statement from the Department of Justice, it was alleged that Walgreens programmed its electronic pharmacy management system to prevent its pharmacists from dispensing less than a full box of five insulin pens, whether the patient needed that amount or not. It also said Walgreens falsely stated that they had not exceeded limits set on total days of supply in its reimbursement claims. This settlement totaled $209.2 million.
In this case, the DOJ said Walgreens admitted that when a federal health program denied a claim because the reported days of supply for a full carton of five insulin pens exceeded the federal program’s days-of-supply limit, the company dispensed and billed for the full carton and reduced the reported days of supply to conform to the program’s days-of-supply limit. Walgreens also admitted that it “repeatedly” reported days-of-supply data to federal health programs that differed from the days-of-supply calculated according to the standard pharmacy billing formula.
The company will pay $60 million as part of a second settlement to resolve allegations it overbilled Medicaid by failing to disclose and charge Medicaid the lower drug prices that it offered the public through a discount program called the Prescription Savings Club. Legally, the company must seek reimbursement only for the “the lowest of certain drug price points, including the ‘usual and customary price'” namely the price offered through such programs as the PSC. Those prices were not disclosed, causing overpayment from Medicaid to Walgreens, the DOJ said. The agency also said that Walgreens admitted it did not identify its PSC program prices as its U&C prices for the drugs on the PSC program formulary, resulting in overpayments.
ON THE RECORD
“Walgreens is pleased to have resolved these matters with the Department of Justice. The company fully cooperated with the government and has admitted no wrongdoing. Walgreens is a company of pharmacists living and working in the communities we serve, and we have always taken the safety and reliability of the medicines our patients need very seriously. We are resolving these matters because we believe it is in the best interest of our customers, patients and other stakeholders to move forward…In relation to these matters, Walgreens has entered into a Corporate Integrity Agreement (CIA) with the Office of the Inspector General of the Department of Health and Human Services. The CIA builds upon the company’s already existing comprehensive compliance program,” Walgreens said in a statement.
“In both settlements, Walgreens admitted and accepted responsibility for conduct the Government alleged in its complaints under the False Claims Act,” the DOJ said in a statement.
Being explicit about decision-making
https://mailchi.mp/900e9e419717/the-weekly-gist-january-25-2019?e=d1e747d2d8
Recently we facilitated a day-long meeting for one of our clients who is looking to build a new governance model for their regional clinical enterprise. It’s a complex undertaking, requiring them to bring together a broad spectrum of stakeholders—their own employed medical group, a handful of independent groups with whom they’ve built partnerships over the years, a joint venture partner, the leaders of the system’s hospitals, and their academic affiliate. All of these relationships—each with its own decision-making structure and incentive model—have accreted over time but have not operated as a cohesive whole. Now, faced with an increasingly competitive marketplace, the system wants to build an overarching structure to coordinate the activities of the disparate constituents, and to allow them to go to market with a unified platform capable of delivering better value to consumers and purchasers.
In preparing for the meeting, we quickly realized that the crux of the problem is decision rights. Every initiative or major decision that the system wants to make is getting bogged down in an endless process of discussion, second-guessing, and turf battles between the constituent groups. In our session with the group, we shared our perspective that the most important part of designing any organizational structure is being very explicit about how decisions are going to get made. To that end, we provided with them a decision-making framework that we’ve seen implemented in other organizations, a variation on the RACI responsibility assignment matrix that’s been a mainstay in organizational science for decades.
At its heart, it’s a role-based decision process, in which different stakeholders are assigned discrete parts to play in coming to a decision. RACI is an acronym for four of the pivotal roles: Responsible, Accountable, Consulted, and Informed. There’s no magic to the specific framework—indeed, there’s a multitude of different flavors of RACI.
(We like the Bain & Company notion of asking “Who has the ‘D’”, or—to paraphrase George W. Bush—who’s the Decider?) Across the day, we introduced the framework, role-played making a specific decision using it, and then began to evaluate a strawman model for the unified clinical enterprise using the framework.
We’ll keep you posted as the model moves from evaluation to implementation, but we were struck by the power of having an explicit, concrete discussion around decision rights. Given the complexity and organizational inertia that characterize many healthcare organizations, taking the time to clarify who gets to make which decisions, and how, seems like a worthwhile endeavor.
Temple University Health loses top execs amid restructuring
Philadelphia-based Temple University Health System President and CEO Larry Kaiser, MD, confirmed in a letter to colleagues that two top executives plan to depart and their roles will be eliminated, The Inquirer reports.
The Jan. 23 letter, obtained by The Inquirer, states that the health system’s CMO Susan Freeman, MD, and Chief Administrative Officer Alan Rosenberg, are departing and their roles will be eliminated.
Dr. Kaiser, who also serves as dean of the affiliated Lewis Katz School of Medicine, wrote in the letter that Philadelphia-based Temple University Hospital CEO Verdi DiSesa, MD, and its CMO will also step down from their positions. He did not specify what the individuals’ new roles would be.
“I ask that all of you work with me and the leadership team as we move forward with our ongoing restructuring that will allow us to continue to provide superb clinical care for the population we serve and an outstanding education for our students,” Dr. Kaiser wrote in the letter.
Temple University Health System is working with a chief restructuring officer to become more financially sustainable. For the three months ended Sept. 30, 2018, the system reported a net loss of $11.63 million.
To access the full report, click here.
Harbinger of things to come as the Healthcare Landscape becomes Dominated by Massive, Vertically-Integrated Competitors
https://www.cnbc.com/2019/01/18/walmart-cvs-health-hammer-out-new-pbm-pharmacy-network-deal–.html
Verticals gonna vertical
As we wrote last week, the recent dust-up between CVS’s pharmacy benefit management (PBM) subsidiary Caremark and Walmart, during which the retail giant threatened to sever its relationship with CVS over a dispute regarding reimbursement levels before finally coming to a settlement, is a harbinger of things to come as the healthcare landscape becomes dominated by massive, vertically-integrated competitors.
A new investigative piece from The Columbus Dispatch this week seems to confirm this view. Examining previously-undisclosed data about CVS’s drug plan pricing practices as part of Ohio’s Medicaid program, the article reveals that CVS paid its own retail pharmacies much higher reimbursement rates than it offered to key competitors Walmart and Kroger to provide generic drugs to Medicaid beneficiaries. According to the article, CVS would have had to pay Walmart pharmacies 46 percent more, and Kroger pharmacies 25 percent more, to match the levels of reimbursement it paid its own retail pharmacies, data that are cited in a state report on the Medicaid pharmacy program that CVS is engaged in a court battle to keep secret. The reimbursement differential is “startling information”, according to a former Justice Department antitrust official quoted in the article. A spokesman for CVS maintained that the PBM’s payment rates are “competitive” and influenced by a complex range of factors. Underscoring the opaque and complicated methodology drug plans use to determine payments to retail pharmacies, independent pharmacy operators were paid more than CVS stores, as were Walgreens stores. A separate analysis of PBM pricing behavior in New York uncovered similar evidence, according to Bloomberg.
The Ohio and New York pharmacy stories are yet more evidence that, as healthcare companies continue to expand their control over greater segments of the “value chain”—combining, for example, insurance, distribution, and care delivery—they are able to flex their market power in ways that look increasingly anti-competitive. Hospitals that “own” their referral sources, insurers that “own” the delivery of care, and pharmacies that “own” drug benefit managers all edge closer to creating closed, proprietary platforms that can lock out competitors in any one segment.
That’s a feature, not a bug—indeed, much of the logic of population health is predicated on “network integrity”: keeping consumers inside a fully-controlled ecosystem of care to enable better coordination and reduce duplication and inefficiencies. Yet as giant healthcare corporations turn themselves into Amazon-style “everything stores”, we need to keep a watchful eye on competition.
Red flags to watch for: using the courts to maintain secret agreements or block the free flow of talent or information, “vertical tying” behavior that requires all-or-nothing contracting, and pricing strategies that leverage market power in one segment to raise prices in another.
The biggest flaw in using “market competition” to lower the cost of care: most companies hate actually competing in the marketplace—a problem made even more vexing by vertical integration.
HENRY KOTULA 