More on the employer health plan churn

https://www.axios.com/newsletters/axios-vitals-64abbaf8-c86f-4ac1-8561-525b0fd33c25.html?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosvitals&stream=top

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A lot of readers gave us feedback on yesterday’s lead item about how millions of working Americans lose or change their employer health plans every month, usually through quitting a job or getting fired/laid off.

One point that came up several times: Employees who don’t leave their jobs sometimes have to switch to new health plans, Bob reports.

  • Larry Levitt of the Kaiser Family Foundation reminded us that 61% of companies that offer health benefits shopped around for new employee plans in 2018, and a quarter of them changed insurers, according to KFF’s annual employer survey.
  • Changing or cutting health benefits for current employees is no small matter — doing so was the driving force behind teachers striking in West Virginia last year.

The bottom line: Employer coverage changes all the time, both when people leave their jobs and when companies decide to tinker with their benefits packages.

 

 

 

7 hospital construction projects costing $300M or more

https://www.beckershospitalreview.com/facilities-management/7-hospital-construction-projects-costing-300m-or-more.html?origin=cfoe&utm_source=cfoe

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Below are seven hospitals or health systems that recently announced, started or completed construction projects worth more than $300 million in the last two months, reported by Becker’s Hospital Review.

1. MetroHealth breaks ground on 264-bed Cleveland hospital
MetroHealth System in Cleveland broke ground April 15 on an 11-story, 264-bed hospital, part of a $946 million revamp.

2. Mount Carmel to open $361M hospital April 28
Mount Carmel Health System in Columbus, Ohio, will open its $361 million, 210-bed replacement hospital April 28.

3. McLaren Health to close 2 hospitals, consolidate services at new $450M facility
McLaren Greater Lansing (Mich.) will shutter two hospitals in South Lansing when its new consolidated $450 million campus near Michigan State University opens.

4. UPMC starts constructing $400M rehab, vision facility
Pittsburgh-based UPMC Mercy broke ground March 14 on a nine-story rehabilitation and vision tower. It is expected to cost $400 million.

5. New York hospital plans $2B campus revamp
Northwell Health’s Lenox Hill Hospital in New York City is preparing a $2 billion revitalization that will include upgraded clinical areas and residential apartments.

6. Sutter opens 274-bed hospital in San Francisco
California Pacific Medical Center Van Ness Campus, an 11-story, 274-bed hospital owned by Sacramento, Calif.-based Sutter Health, opened in San Francisco March 2. The hospital project cost about $2.1 billion.

7. Penn Medicine alters design of $1.5B pavilion
The design team responsible for Philadelphia-based Hospital of the University of Pennsylvania’s $1.5 billion pavilion has changed its plans for the layout and shape of the building. It is expected to open in 2021.

 

 

Las Vegas hospital doesn’t contract with any payers

https://www.beckershospitalreview.com/payer-issues/las-vegas-hospital-doesn-t-contract-with-any-payers.html?origin=cfoe&utm_source=cfoe

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Elite Medical Center, a Las Vegas-based acute care hospital that some experts say is operating similarly to a 24/7 freestanding emergency room, doesn’t contract with any payers, according to the Milbank News.

EMC is a state-licensed hospital. It is an unaccredited hospital that has no agreements with insurers, meaning patients have to pay out-of-network prices for care. Under state law, EMC isn’t required to be accredited by CMS or accept public or private insurance.

On EMC’s website, the medical center states, “This facility is not a participating provider in any health benefit plan provider network. However, under the [ACA], your health insurance company is required to process your emergency visit at in-network benefit levels. The physician providing medical care at this facility may bill separately from the facility for the medical care provided to you.”

While Nevada doesn’t provide licenses for freestanding ERs — though hospitals can open satellite ERs at other locations — EMC obtained a state license to operate as a hospital. As a result, it has to be able to admit patients for 48 hours.

Bill Welch, president and CEO of the Nevada Hospital Association, told Milbank News: “We think that Elite Medical Center, if they want to operate as a hospital in the state, that they should operate as a CMS-certified center and they should be accredited and Medicare participating. Without those things, we’re concerned.”

EMC CEO Butch Frazier defended the hospital in an emailed statement to the publication, saying it often has higher online patient ratings than University Medical Center in Las Vegas.

“EMC tries hard to make sure that the ultimate charges paid by the patients and by the insurers to EMC are in line with what they are paying for the same services at other hospitals in the area,” Mr. Frazier said. He added that EMC is seeking CMS accreditation.

 

8 hospitals closed so far this year — here’s why

https://www.beckershospitalreview.com/finance/8-hospitals-closed-so-far-this-year-here-s-why.html?origin=cfoe&utm_source=cfoe

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From reimbursement landscape challenges to dwindling patient volumes, many factors lead hospitals to close.

Here are the factors that led eight hospitals to close so far this year:

1. Belmont Community Hospital, a 99-bed hospital in Bellaire, Ohio, closed April 5. Hospital officials cited a decline in patient volume as the reason for the closure. “Utilization of BCH has continued to decline despite efforts to offer varying services at the facility,” the hospital said in a press release. “The decline has place[d] a financial strain on the BCH that cannot be sustained in the long term.”

2. Kentuckiana Medical Center in Clarksville, Ind., closed April 5. The hospital, which opened in 2009, faced financial losses for years and previously filed for Chapter 11 bankruptcy, according to the Louisville Courier Journal.

3. Horton (Kan.) Community Hospital closed March 12. The 25-bed critical access hospital, owned by Kansas City, Mo.-based EmpowerHMS, shut down after struggling to pay utilities and missing payroll for several weeks. The hospital entered Chapter 11 bankruptcy on March 14.

4. Georgiana (Ala.) Medical Center closed March 8. Ivy Creek Healthcare in Georgiana, which owns the hospital, cited growing costs and cuts to reimbursement as the reasons for the closure.

5. Cumberland River Hospital in Celina, Tenn., closed March 1. In January, officials announcedthat the hospital was shutting down due to financial challenges. They said Cumberland River Hospital had experienced significant losses in recent years due to declining reimbursements and lower patient volumes.

6. Harrisburg, Pa.-based UPMC Pinnacle closed its hospital in Lancaster, Pa., on Feb. 28. The health system announced plans in December to close UPMC Pinnacle Lancaster and transition inpatient services to another one of its hospitals located about 7 miles away. In a Feb. 15 news release, UPMC Pinnacle President and CEO Philip Guarneschelli said consolidating inpatient services on one campus would make care more convenient for patients.

7. Oswego (Kan.) Community Hospital and its two affiliated clinics closed Feb. 14. A statement from the board announcing the closure said the hospital, owned by Kansas City, Mo.-based EmpowerHMS, wasn’t bringing in enough revenue to cover payroll and other expenses. After the abrupt closure, the hospital entered Chapter 11 bankruptcy on March 17.

8. Washington County Hospital in Plymouth, N.C., closed Feb. 14 after missing payroll on Feb. 8. The critical access hospital is now working its way through the Chapter 7 bankruptcy process. The hospital is one of several facilities owned by Kansas City, Mo.-based EmpowerHMS that has entered bankruptcy or closed in recent months. The Washington County Board of Commissioners is working with state and federal agencies to investigate the hospital’s financial and operational issues and working to restore medical services as the hospital, according to a Feb. 19 public service announcement on Washington County’s website.

 

 

Does Beneficiary Switching Create Adverse Selection For Hospital-Based ACOs?

https://www.healthaffairs.org/do/10.1377/hblog20190410.832542/full/?utm_source=Newsletter&utm_medium=email&utm_content=Beneficiary+Switching+And+Hospital-Based+ACOs%3B+Biologics+Are+Natural+Monopolies%3B+An+Average+Lifetime+Earnings+Standard+For+Drug+Prices&utm_campaign=HAT+4-15-19&

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Despite the many uncertainties in the current health care delivery environment, payers and providers continue to demonstrate considerable interest in alternative payment models, including Medicare Shared Savings Program (MSSP) accountable care organizations (ACOs). At the same time, concerns persist about the ability of the MSSP to provide a sustainable pathway toward transformation for health care providers and to generate savings to the Medicare program, a key outcome measure. In fact, an August 2018 Health Affairs blog post by Seema Verma, director of the Centers for Medicare and Medicaid Services (CMS), concludes that the net financial impact of the program is negative to taxpayers, and that hospital-based ACOs tend to be the drivers of this overall negative performance.

This analysis has influenced recent changes to the MSSP under the “Pathways to Success” rule, with major policy implications for participants and the program’s long-term sustainability. In particular, CMS’s analysis describes physician-led ACOS as low revenue and hospital-based ACOs as high revenue, concluding that the former had net savings of $0.182 billion, while the latter had net losses of $0.231 billion. Similarly, J. Michael McWilliams and colleagues conclude that physician-group ACOs had significantly larger savings than hospital-integrated ACOs. It has been suggested that these differences are due to hospitals continuing to pursue the high-cost activities that physician-led ACOs do not pursue, due to differing reimbursement incentives (for example, hospital revenue is more dependent on admissions, and so care management activities that avoid admissions are less robust in hospital-based ACOs). This finding has influenced new program rules allowing physician-led ACOs to stay in a lower-risk track of the MSSP longer than hospital-based ACOs.

Our MSSP experience at University of Wisconsin (UW) Health—the academic health system partner of the University of Wisconsin School of Medicine and Public Health—leads us to believe that there is an alternative explanation for hospital-based ACOs’ seemingly poorer financial performance. Specifically, as Medicare beneficiaries develop new and more complex diseases, the increased utilization they require leads them to facilities that have more specialized care, which may more likely be part of a hospital-based ACO than a physician-led one. 

A Closer Look At The Research

Several recent analyses have countered that the CMS analysis, which assesses program financial performance by comparing ACO spending to a benchmark target below which the ACO may share in savings, does not use a valid counterfactual. A more valid counterfactual would instead compare ACO actual spending to what the same providers’ Medicare spending would have been had they not participated in the ACO program. Analyses using this counterfactual have found that the MSSP has in fact produced savings for the taxpayers overall, although some have also concluded, such as CMS, that hospital-based ACOs perform worse than physician-led ACOs.

More recently, the Medicare Payment Advisory Commission analyzed spending at the individual beneficiary level, rather than the ACO level. The analysts found that individuals who were continuously attributed to the same ACO year after year had lower spending growth compared to those whose attribution was switched to a different, existing ACO from one year to the next. At UW Health, our experience as an MSSP ACO from 2013 through 2017 supports this finding and illustrates some of the potential pitfalls in the recent policy changes for MSSP ACOs. 

UW’s Analysis: Adverse Selection Among “Switchers”

UW Health participated in the MSSP Track 1 from 2013 through 2017, before switching to the Next Generation ACO program. We compared patient characteristics and use for the cohort of our attributed beneficiaries older than age 65 for whom we had 12 months of claims data in 2015 and who, in 2016, continued to be attributed to us, versus beneficiaries who were newly attributed to us in 2016 (Exhibit 1).

Exhibit 1: Spending And Use of Continuously And Newly Attributed Medicare Beneficiaries, UW Health ACO, 2015–16

Source: Authors’ analysis. Notes: HCC is Hierarchical Condition Category. PBPY is per beneficiary per year. aHCC scores are calculated to assess patient complexity and risk. A higher score is associated with increased complexity and increased expected cost. Under 2016 MSSP rules, PBPY costs are adjusted based on beneficiary HCC scores calculated from the prior year, adjusted up only for demographic changes. Therefore, the 2016 PBPY average costs in the exhibit reflect risk adjustment using 2015 HCC scores. 

While 96 percent of continuing beneficiaries in 2016 were attributed to us through services from a primary care provider, only 73 percent of those new to the ACO in 2016 received their attribution this way. In other words, more than one in four of the “switchers” were assigned to the ACO due to services from a specialty care provider. Costs for these two populations (calculated from data CMS provides to ACOs as part of program participation) were very different. The average per-beneficiary-per-year (PBPY) cost in 2015 for continuously attributed beneficiaries was $8,123, or $1,380 higher than the newly attributed population’s PBPY cost of $6,743. However, in 2016, the average PBPY cost for continuously attributed beneficiaries was $723 lower than the 2016 average PBPY cost for newly attributed beneficiaries, and costs for the newly attributed cohort rose by 49.3 percent, compared with 15.1 percent for the continuously attributed group. This suggests that the newly attributed beneficiaries experienced a significant change in their health status after being attributed to our ACO, resulting in a dramatic rise in use, and also potentially explaining their high degree of specialty care attribution.

Our findings suggest that adverse selection among individuals whose attribution “switched” into hospital-based ACOs may at least partly explain the differential financial performance of physician-based versus hospital-based ACOs. As noted previously, it is possible that the increased use these patients require leads them to facilities that have more specialized care, which may more likely be part of a hospital-based ACO than a physician-led one. For example, our ACO, made up of not only the faculty physician group but also the hospital and clinics and school of medicine and public health, includes a comprehensive cancer center. Beneficiaries newly attributed to our ACO in 2016 were almost twice as likely to have a new diagnosis of cancer in 2016 compared with continuously attributed beneficiaries (6.1 percent versus 3.3 percent—not shown).

Current MSSP Risk Adjustment May Not Adequately Address The High Complexity Of “Switchers”

Because many of the newly attributed beneficiaries were both high cost during the performance year and low cost during the prior year, they entered our program with low Hierarchical Condition Category (HCC) scores, under the system used by CMS to adjust for risk. In fact, almost 10 percent of newly attributed beneficiaries in 2016 had no health care use at all in 2015 (Exhibit 1). Prior to the Pathways to Success program, negative health status changes for continuously enrolled beneficiaries were not included in risk adjustment. For continuously attributed beneficiaries, CMS adjusted risk scores down from the previous year if the HCC score decreased but used only demographic changes to adjust up. Those beneficiaries who were healthy with little to no health care use in 2015 but with a significant change in health status in 2016 had low HCC scores coming into 2016, despite both high risk and use during the 2016 performance year. As a result, a cohort of relatively high-cost beneficiaries in 2016 would not be accounted for in that year’s risk score, resulting in an unfavorable assessment of an ACO’s true financial performance.

New program rules attempt to address concerns about adequate risk adjustment in the MSSP, allowing for a one-time benchmark increase of up to 3 percent to account for unexpected higher use due to increased complexity and health care needs among all attributed beneficiaries. While this change is generally welcomed by the MSSP community, our experience suggests it may be inadequate to account for the added complexities of switchers. The average HCC score for newly attributed beneficiaries to our ACO was 1.01 (Exhibit 1). These scores are based on the group’s health care use in 2015, when the newly attributed cohort was still “healthy,” but they were used during the 2016 performance year. However, calculated scores from the actual experience of the patients during 2016 reveals an average HCC score of 1.34, again indicating that they experienced significant changes in health status. While the new policy of allowing for an increase helps account for these changes, 3 percent may not be adequate.

Prospective Attribution May Mitigate Some Of The Impact Of Adverse Selection

The methodology for attribution of Medicare beneficiaries to ACOs has been a topic of debate since the inception of the MSSP. Under the original model, individuals were assigned to an ACO based on retrospective attribution, meaning that they received a plurality of their services from primary care providers throughout the performance year. If they received no services from a primary care provider, they could be attributed based on services from a specialty care provider. Over the years, CMS has refined the process to increase the likelihood that attribution is based on services from a primary care provider. This results in an ACO not knowing until after the year is over who exactly are their ACO beneficiaries, making it possible for individuals who were in a different ACO the previous year (or not in an ACO at all) to become part of an ACO without that ACO becoming aware until after the fact.

Some of the newer ACO models, notably the Next Generation ACO program, use prospective attribution, whereby only those beneficiaries who received care from the ACO providers in the prior year can be included in the performance year. This method allows for removal of beneficiaries throughout the year but no additions. Under the previous regulations, beneficiaries in MSSP Track 1 were attributed retrospectively, potentially resulting in ACOs becoming responsible for previously healthy individuals who were not part of the ACO in the prior year but whose health status deteriorated during the performance year, thereby driving up average costs without the ACO having meaningful opportunity to intervene. Under the new MSSP regulations, ACOs annually choose whether beneficiaries are assigned through retrospective or prospective attribution, potentially mitigating some of the adverse selection concern.

Looking Ahead

Going forward, it will be important for policy makers and evaluators alike to consider unique program elements that may result in adverse selection or other untoward consequences that are beyond the control of an individual ACO. In the meantime, CMS and ACO leaders can make some choices that help ameliorate some of the unintended or undesirable consequences. CMS can continue to look for ways to evolve program rules, including consideration of additional risk-adjustment methodologies. ACO leaders can choose prospective attribution to avoid adverse selection, especially if their ACO includes hospitals or large specialty groups. CMS can also eliminate the disparities in the program rules between hospital-based and physician-led ACOs, at least until there is increased clarity around differential performance. Ultimately, continued evaluation and program refinement, allowing for successful participation by all different types of ACOs, will be necessary to ensure that all Medicare beneficiaries receive the highest-quality, affordable care and that the program is a good steward of taxpayer funds.

 

 

Safety-net providers operated with an average margin of 1.6% in 2017

https://www.healthcarefinancenews.com/news/safety-net-providers-operated-average-margin-16-2017?mkt_tok=eyJpIjoiWkdWbVpqTmxZelJpT1RNMCIsInQiOiJBa3NWRnZ1KzVEc29BeFkyMnRTUUtmaFRZNWgrVmVGTXJ0SlwvdW5NVitiUGQzVDJjYXFXRkd4eUlvckROVG1uQkxQdE9ROVZOM0pwQWJBUlpmK0dGZnEwS0V2XC9wRUs4SUQ3bFc3bmorbVlTeXZQaHhHbjRva2V6UnQwakZtVHZaIn0%3D

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This is less than half their 2016 average and below the 7.8 percent average of other U.S. hospitals, according to the annual study.

Hospitals that serve vulnerable patients have much lower average margins that other providers, according to America’s Essential Hospitals.

The safety-net providers have persistently high levels of uncompensated and charity care that pushed average margins down to one-fifth that of other hospitals in 2017, according to the annual study, Essential Data: Our Hospitals, Our Patients. They operated with an average margin of 1.6 percent in 2017 — less than half their 2016 average and far below the 7.8 percent average of other U.S. hospitals, according to the data from Essential Hospitals’ 300 members.

While these hospitals represent about 5 percent of all U.S. hospitals, they provided 17.4 percent of all uncompensated care, or $6.7 billion, and 23 percent of all charity care, or $5.5 billion in 2017, the study said.

THE IMPACT

Amercia’s Essential Hospitals fears further financial pressure from $4 billion in federal funding cuts to disproportionate share hospitals slated to go into effect on October 1. This represents a third of current funding levels.

The DSH payments are statutorily required and are intended to offset hospitals’ uncompensated care costs. In 2017, Medicaid made a total of $18.1 billion in DSH payments, including $7.7 billion in state funds and $10.4 billion in federal funds, according to the Medicaid and CHIP Payment and Access Commission, or MACPAC.

MACPAC recommends starting with cuts of $2 billion in the first year.

The association and other organizations have been urging Congress to stop or phase-in the cuts. Speaker Nancy Pelosi said Congress must take action to ease the DSH cuts.

TREND

Since 1981, Medicaid DSH payments have helped offset essential hospitals’ uncompensated care costs.

The study data shows essential hospitals provide disproportionately high levels of uncompensated and charity care.

In 2017, three-quarters of essential hospitals’ patients were uninsured or covered by Medicaid or Medicare and 53 percent were racial or ethnic minorities. They served 360,000 homeless individuals, 10 million with limited access to healthy food, 23.9 million living below the poverty line, and 17.1 million without health insurance, the study said.

The association’s members averaged 17,000 inpatient discharges, or 3.1 times the volume of other acute-care hospitals. They operated 31 percent of level I trauma centers and 39 percent of burn care beds nationally.

ON THE RECORD

“Our hospitals do a lot with often limited resources, but this year’s Medicaid DSH cuts will push them to the breaking point if Congress doesn’t step in,” said association President and CEO Dr. Bruce Siegel. “Our hospitals are on the front lines of helping communities and vulnerable people overcome social and economic barriers to good health, and they do much of this work out of their own pocket. They do this because they know going outside their walls means healthier communities and lower costs through avoided admissions and ED visits.”

 

 

A digital front door that no one’s walking through

The Weekly Gist: The Winter is Coming Edition

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Here’s this week’s good news in health IT: over 90 percent of hospitals now provide portals or similar platforms allowing patients to electronically access their medical records, according to a new report from the Office of the National Coordinator for Health IT (ONC).

The bad news, however, is that few patients actually use them. Fewer than eight percent of hospitals report that half or more of their patients have activated their patient portal, and nearly 40 percent reported that less than ten percent of patients have logged on. This is in spite of data in the report showing that two-thirds of hospitals offer services like secure messaging, electronic bill pay, and online scheduling that are highly valued by consumers.

The root cause lies in simplicity and connectivity. Each hospital or independent physician practice has its own portal, forcing the patient to manage multiple logins and navigate myriad systems, each of which only displays a slice of their medical records. Rarely can the systems communicate with each other to allow providers access to the patient’s complete record.

Asking patients to navigate multiple portals from different healthcare providers is like asking them to use different web browsers for each site they visit—it’s cumbersome and nonsensical, the hallmark of a design driven by regulatory requirement rather than consumer value.

What’s needed is one, unified consumer portal for healthcare, which integrates all the different providers’ information feeds. For that, we’d need a truly consumer-centric healthcare system, built around and controlled by the individual. Maybe one day.