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More Than One-Quarter of High-Cost Medicare Patients Have Persistent High Costs Over Three Years

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https://www.commonwealthfund.org/publications/journal-article/2019/jan/high-cost-medicare-patients-persistent-three-years

Medicare high costs of outpatient care and medications

The Issue

It has been well documented that a small portion of Medicare patients — just 10 percent — account for more than half the program’s spending in any given year. But how many of these patients continue to incur high costs over time? Using three years of Medicare claims data (2012–2014), Commonwealth Fund–supported researchers sought to determine the share of patients with persistently high costs, as well as the key traits that differentiate them from those who incur high costs in only one or two years — or never.

What the Study Found

  • More than one-quarter (28%) of patients who had high costs in 2012 remained persistently high-cost over the subsequent two years, while 72 percent were transiently high-cost — for one or two years.
  • Persistently high-cost patients were younger (66.4 years) than either the transiently high-cost (73.3 years) or never high-cost (70.5 years) patients. They were also more likely to be members of racial and ethnic minorities, eligible for Medicaid in addition to Medicare, and qualify for Medicare because of end-stage renal disease.
  • On average, in the first year, persistently high-cost patients spent $64,434, compared with $45,560 for the transiently high-cost and $4,538 for the never high-cost.
  • Persistently high-cost patients spent more in all categories of spending. Notably, they spent more than four times as much as transiently high-cost patients did in outpatient settings ($16,148 v. $4,020) and on drugs ($15,467 v. $3,841).

The Big Picture

The 28 percent of Medicare beneficiaries with persistently high costs represent slightly less than 3 percent of the overall Medicare population but account for nearly 20 percent of Medicare spending for the three years studied. Only 5 percent of their total spending was related to potentially preventable hospitalizations, suggesting that it may be of little benefit to focus efforts on reducing such incidents.

The Bottom Line

Medicare patients who incur high costs over several years spend more on outpatient care and medications than those with lower costs. Targeting interventions on those two areas could help reduce overall spending.

 

 

8 health systems with strong finances

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https://www.beckershospitalreview.com/finance/8-health-systems-with-strong-finances-010719.html?origin=cfoe&utm_source=cfoe

Here are eight hospitals and health systems with strong operational metrics and solid financial positions, according to recent reports from Moody’s Investors Service and Fitch Ratings.

Note: This is not an exhaustive list. Hospital and health system names were compiled from recent credit rating reports and are listed in alphabetical order.

1. Dallas-based Baylor Scott & White Health has an “Aa3” rating and stable outlook with Moody’s. The health system has strong cash flow margins and its favorable demographics will contribute to volume and revenue growth, according to Moody’s.

2. Orange, Calif.-based Children’s Hospital of Orange County has an “AA-” rating and stable outlook with Fitch. The hospital has a strong financial profile, and Fitch expects its capital-related ratios to improve.

3. Newark, Del.-based Christiana Care has an “Aa2” rating and stable outlook with Moody’s. The health system has solid margins and a robust balance sheet, according to Moody’s.

4. Fort Worth, Texas-based Cook Children’s Medical Center has an “Aa2” rating and stable outlook with Moody’s. The hospital has a strong market position and solid operating performance, according to Moody’s.

5. Durham, N.C.-based Duke University Health System has an “Aa2” rating and stable outlook with Moody’s. The health system is a leading provider of tertiary and quaternary services and has solid margins and cash levels, according to Moody’s.

6. St. Louis-based SSM Health Care has an “AA-” rating and stable outlook with Fitch. SSM has a strong financial profile, and Fitch expects the system to continue growing unrestricted liquidity and to maintain improved operational performance.

7. Appleton, Wis.-based ThedaCare has an “AA-” rating and stable outlook with Fitch. The health system has a leading market share in a stable service area and strong operating performance, according to Fitch.

8. Cincinnati-based TriHealth has an “AA-” rating and stable outlook with Fitch. Fitch expects the health system to maintain good operating ratios leading to liquidity growth.

 

Bay Medical to lay off up to half of 1,450 staff

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https://www.beckershospitalreview.com/hospital-management-administration/bay-medical-to-lay-off-up-to-half-of-1-600-staff.html

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Panama City, Fla.-based Bay Medical Sacred Heart revealed on Dec. 4 it expects to lay off 635 staff members early next year once it reopens, according to a news release obtained by the Panama City News Herald.

Bay Medical sustained heavy wind and water damage when Hurricane Michael hit the U.S. coastline in October, and has ceased all operations apart from its emergency room since the storm. Officials said they plan to reopen the hospital in stages starting soon after Jan. 1. However, the hospital will reopen at one-fourth of its previous 323-bed size.

The first phase of the reopening will include 75 inpatient beds with eight operating rooms and five catheterization labs, according to the report.

Hospital officials said in the Dec. 4 news release they plan to keep about half of the 1,450-person staff after Feb. 4, 2019, after the hospital reopens. A hospital board of trustee member told the Panama City News Herald “all levels of service will be affected, from department heads to the maintenance guys.” About one-third of the affected individuals are part-time, as needed or temporary employees, a hospital spokesperson told Becker’s.

Bay Medical has continued to pay employees and provide benefits since the hurricane and will continue to pay employees and fund benefits through Feb. 4 and Feb. 28, respectively.

“We are heartbroken to share this news at such a difficult time,” Bay Medical CEO Scott Campbell said in the Dec. 4 news release. “The decision to reduce our workforce has been incredibly difficult, but necessary to ensure our ability to continue providing care to the community and preserve critical services.”

The hospital is also in the midst of a transfer of control. Bay Medical’s owner, Nashville, Tenn.-based Ardent Health Services, recently signed a letter of intent to transfer its controlling interest in the hospital to St. Louis-based Ascension.

To aid in the workforce transition, Ascension said it plans to hold a job fair tentatively scheduled for Dec. 10-11. In a Dec. 4 statement to the Panama City News Herald, Ascension and Ardent said they are committed to hiring as many eligible employees as possible for openings in their systems.

To access the full report, click here.

 

CIVICA RX ADDS 12 HEALTH SYSTEMS AS FOUNDING MEMBERS

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https://www.healthleadersmedia.com/strategy/civica-rx-adds-12-health-systems-founding-members

The alliance, which was formed last year by seven health systems and three philanthropic organizations, aims to tamp down drug costs by collaborating on generics.

KEY TAKEAWAYS

Health system executives and policymakers alike are looking for ways to get drug prices under control.

The consortium of major health systems aims to tackle cost and shortage challenges by producing its own generics.

The number of participating hospitals has grown to about 750 in the U.S., with more expected to join.

A nonprofit alliance of health systems seeking to rein in drug costs and alleviate shortages has grown significantly in the four months since its launch.

Civica Rx announced Monday that 12 additional health systems, representing about 250 hospitals, have joined the venture as founding members, bringing the total number of participating U.S. hospitals to about 750.

The organization described its growth as momentum, with future growth expected, as policymakers and health system executives nationwide look for ways to wrangle escalating drug costs.

Three philanthropic organizations and seven major health systems—including Trinity Health, Catholic Health Initiatives, HCA Healthcare, Intermountain Healthcare, Mayo Clinic, Providence St. Joseph Health, and SSM Health—founded Civica Rx last September, with a plan to produce generic drugs to stabilize supply and challenge manufacturers that have hiked prices sharply.

With its launch, the organization identified 14 hospital-administered generics as its initial focus. The plan is for members to drive the selection of additional drugs.

The 12 new founding members announced Monday are as follows:

  • Advocate Aurora Health
  • Allegheny Health Network
  • Baptist Health South Florida
  • Franciscan Alliance
  • Memorial Hermann Health System
  • NYU Langone Health
  • Ochsner Health System
  • Sanford Health
  • Spectrum Health
  • St. Luke’s University Health Network
  • Steward Health Care
  • UnityPoint Health

In a statement, Civica Rx CEO Martin VanTrieste expressed excitement and gratitude for the additions.

“Drug shortages have become a national crisis where patient treatments and surgeries are canceled, delayed or suboptimal,” VanTrieste. “We thank these organizations for joining us to make essential generic medicines accessible and affordable in hospitals across the country.”

The three philanthropic organizations that helped found Civica Rx are the Gary and Mary West Foundation, Laura & John Arnold Foundation, and the Peterson Center on Healthcare. The organization is collaborating also with the American Hospital Association’s Center for Health Innovation.