Markups on care can fatten hospital budgets—even if few patients foot the full bill

http://www.fiercehealthcare.com/finance/markups-care-can-fatten-hospital-budgets-even-if-few-patients-foot-full-bill?mkt_tok=eyJpIjoiTUdJMU1UYzBZMlptTlRFNSIsInQiOiIxU3dwUGNwOEpwMmQyQk9NNklmU3NOaTVuY3FcL0t6UjNVeHhNMFdPRmplQktSNWRcL2NhdW50a2d3cmJrelBlWUxobkIyemU3TGpVejE4akRvT3RpekFOZW84bXpnaHFpcXl2ME1USCtCSVVKZ2Jhdldlc0tmRUFWbUY4Z1lLbzRLIn0%3D&mrkid=959610&utm_medium=nl&utm_source=internal

Finances

This story originally appeared in Kaiser Health News.

Few patients pay a hospital’s full price for a procedure or test. But a new study shows why those charges still matter.

Economists at the Federal Reserve Board and the American Enterprise Institute found that list prices, often dismissed as meaningless by the hospital industry, are a critical gauge of which hospitals ultimately receive higher payments.

An additional dollar in list price was associated with an additional 15 cents in payment to a hospital for privately insured patients, according to the study, which relies heavily on data from California. It was published Monday in the journal Health Affairs.

The researchers, Michael Batty and Ben Ippolito, also found key differences in list prices across hospitals and how much they were marked up, compared to operating costs. A large, for-profit urban hospital that was part of a chain had list price markups that were 360 percent higher than those of a small, independent nonprofit hospital in a rural area. (The hospitals were not named in the study.)

Consumers might assume that higher prices indicate better care and improved outcomes for patients. However, the study looked at rates of hospital readmission—a potential indicator of poor outcomes—and couldn’t find any evidence that higher list prices corresponded with better quality.

Hospital care accounts for a third of the nation’s $3.4 trillion in annual health spending. Hospital prices and payments are key to any discussion about bringing the high cost of healthcare under control for U.S. employers, government programs and consumers.

“High list prices do matter for patients,” said Ippolito, one of the study’s co-authors and a healthcare economist at the American Enterprise Institute, a conservative think tank in the District of Columbia. “This directly contradicts the mantra you hear from providers that there’s no reason to pay attention to this.”

 

WHO puts medication-related errors on global hit list

http://www.fiercehealthcare.com/healthcare/who-puts-medication-related-errors-global-hit-list

Medication errors cause at least one death every day and injure roughly 1.3 million people each year in the United States alone. But it’s not only a national problem, and the World Health Organization is taking action to reduce these preventable adverse events worldwide.

The WHO aims to reduce severe, avoidable medication-associated harm in all countries by 50% over the next five years.

“We all expect to be helped, not harmed, when we take medication,” said WHO Director-General Dr. Margaret Chan in an announcement about its new initiative. “Apart from the human cost, medication errors place an enormous and unnecessary strain on health budgets. Preventing errors saves money and saves lives.”

Indeed, the costs related to medication errors are high. The WHO estimates the costs are $42 billion worldwide, almost 1% of total global health expenditure

To reduce these errors, the WHO intends to address weaknesses in health systems that lead to medication errors, offer ways to improve the way providers prescribe and distribute medicine, and increase patient awareness about the risks associated with the improper use of medication.

Reasons for the errors are often associated with health worker fatigue, overcrowding, staff shortages, poor training and wrong information given to patients. In many cases any of these causes or a combination of them can affect the prescribing, dispensing, consumption and monitoring of medications, according to WHO.

But all of these medication errors are potentially avoidable, according to WHO, if organizations put systems and procedures in place to ensure the right patient receives the right medication at the right dose via the right route at the right time.

“Most harm arises from systems failures in the way care is organized and coordinated, especially when multiple health providers are involved in a patient’s care. An organizational culture that routinely implements best practices and that avoids blame when mistakes are made is the best environment for safe care,” the WHO said in the announcement.

Although many organizations rely on health IT systems that are designed to improve prescription ordering and medication administration, a recent study finds these systems can actually contribute to medical errors. Some experts warn that digital prescription systems miss potential drug errors, and the Office of the National Coordinator for Health IT has called on vendors and providers to reduce the number of “pick list” medication errors.

To achieve its goal of cutting the number of these mistakes by half, WHO is calling on countries to focus on medicines with a high risk of harm if used improperly, patients who take multiple medications for different diseases and conditions, and patients who are going through transitions of care.

The initiative aims to make improvements in each stage of the medication use process including prescribing, dispensing, administering, monitoring and use. WHO aims to provide guidance and develop strategies, plans and tools to ensure that the medication process has the safety of patients at its core, in all healthcare facilities.

 

9 healthcare systems join forces with IHI to reduce healthcare inequities

http://www.fiercehealthcare.com/healthcare/9-healthcare-systems-join-forces-ihi-to-reduce-healthcare-inequities?mkt_tok=eyJpIjoiTUdJMU1UYzBZMlptTlRFNSIsInQiOiIxU3dwUGNwOEpwMmQyQk9NNklmU3NOaTVuY3FcL0t6UjNVeHhNMFdPRmplQktSNWRcL2NhdW50a2d3cmJrelBlWUxobkIyemU3TGpVejE4akRvT3RpekFOZW84bXpnaHFpcXl2ME1USCtCSVVKZ2Jhdldlc0tmRUFWbUY4Z1lLbzRLIn0%3D&mrkid=959610&utm_medium=nl&utm_source=internal

Patient-centered care

Henry Ford Health System, Kaiser Permanente Health Plan and Hospitals and Rush University Medical Center are among nine healthcare systems working on a new initiative to reduce inequities in health and healthcare access, treatment and outcomes.

The Institute for Healthcare Improvement (IHI) launched its two-year “Pursuing Equity” initiative on Monday. Its goal is to break new ground by explicitly addressing institutional racism and by identifying ways healthcare organizations can reduce clinical disparities of care as well as improve equity in employee wellness and social determinants of health.

The other systems participating in the project include HealthPartners in Bloomington, Minnesota; Main Line Health in Newton Square, Pennsylvania; Methodist Le Bonheur Healthcare, Memphis, Tennessee; Northwest Colorado Health, Steamboat Springs, Colorado; and Southern Jamaica Plain Health Center, Brigham & Women’s Hospital, Jamaica Plain, Massachusetts.

Each system will build on the work they’ve already done within their institutions, including launching programs to reduce clinical disparities, track equity in process and outcomes data, and improve knowledge and capability.

“We see a future where every healthcare system in the country pursues equity as part of daily work and core skills, ensuring that individuals and communities can attain their full health potential—and we believe Pursuing Equity is an important step in creating a blueprint for other organizations to follow,” said Derek Feeley, IHI president and CEO, in an announcement (PDF). “Pursuing Equity is part of the next phase of IHI’s ongoing commitment to address the unjust, costly, and persistent inequities in health and healthcare across the nation. We are energized and ready to continue this critical work.”

The initiative will be funded by theRx Foundation, Bristol-Myers Squibb Foundation, and the participating health systems.

Moody’s maintains stable outlook on for-profit hospital sector

http://www.beckershospitalreview.com/finance/moody-s-maintains-stable-outlook-on-for-profit-hospital-sector-033117.html

OR Efficiencies

Moody’s Investors Service has maintained its stable outlook on the U.S. for-profit hospital sector for 2017, as it expects higher reimbursement rates from private payers to drive revenue growth.

Over the next 12 to 18 months, Moody’s expects for-profit hospitals to benefit from a 1 to 2 percent rise in patient volumes. The debt rating agency said the increase will be driven by higher demand for healthcare services due to decreasing unemployment and an aging population. However, programs that aim to reduce utilization and cost of care will offset this positive trend, according to Moody’s.

The debt rating agency expects higher private payer rates to drive revenue growth at for-profit hospitals. Moody’s said this growth will be constrained by cuts to laboratory and outpatient reimbursement and reduced Medicaid disproportionate share hospital payments.

“Positive same-facility revenue growth and flat margins drive our stable outlook for the U.S. for-profit hospital sector,” said Moody’s Senior Vice President Jessica Gladstone. “Margins will hold steady as company-specific actions offset multiple industry challenges, including higher wage and benefits expense stemming from nursing shortages and increased physician employment.”

Many for-profit hospital operators are divesting less-profitable facilities and integrating acquisitions, which will benefit their margins, according to Ms. Gladstone.

The Devil is in the Culture: It is all about Will!

http://www.mobihealthnews.com/content/value-based-care-patient-engagement-local-attention-and-digital-technology-are-fixes

Image result for cartoon the devil in the culture

As lawmakers on Capitol Hill wrangle over the fate of the Affordable Care Act and its would-be replacement, the American Health Care Act, the National Academy of Medicine said its four main priorities for fixing the country’s healthcare industry include continuing the shift from fee-for-service to value based payment models; empowering people to be fully engaged in their healthcare decisions; tapping communities for local health solutions; and implementing integrated services and seamless digital interfaces.

Writing a blog for the Journal of the American Medical AssociationDonald M. Berwick, MD, acknowledged that these solutions don’t exactly reinvent the wheel.

“The strength of the Vital Directions report is not in its innovativeness; it contains no surprises,” said Berwick. “This report offers a template for change broad and inclusive enough for it to be a charter for coherent and effective system redesign.”

The first step in that redesign, the shift from volume to value, is already underway, and the academy contends that its continuation is vital in terms of reducing waste and improving value.

Berwick agreed that this shift is needed, but wrote that fee-for-service behaviors “and top line-driven revenue growth strategies continue to dominate healthcare economies, and recent political pushback has been strong against expanding effective bundled payment models and value-based pharmaceutical purchasing.”

The report also cites evidence that underinvestment in social services relative to healthcare services may be contributing to the country’s poor health performance. To reduce inequality and increase cost savings, the report recommends integrating clinical care services and non-medical services, such as housing, food, transportation and income assistance.

That solution leads into another of the report’s action plans, activating communities. A person’s health is very much a product of the available social supports within their community, their physical environment and their behavior. The U.S. continues to invest far less in community-based social services, which the report said is vital to combating health threats such as chronic disease and substance abuse. The report recommends investing in local leadership and infrastructure capacity for public health initiatives, and calls for collaboration from leaders in different sectors, such as business, education, housing and transportation. For this approach to be successful, close coordination is needed between medical and social services.

When it comes to empowering and engaging people, the report claims that patients are often insufficiently involved in their own care decisions, sometimes resulting in care that doesn’t take their specific life situations into account. Health regimens and treatments should work within that context, and policymakers should focus on increasing the amount of information that’s available, the authors wrote. Telehealth was identified as an important component of that, as it helps patients in underserved or remote areas and essentially gives them greater ownership of their health information.

Revamping digital interfaces, the fourth action plan, is particularly vital, the authors said, because the extent to which systems can share and make use of data remains severely limited. That causes breaks in care continuity, which not only predisposes the patient to harm but increases stress for the clinician. Creating principals for end-to-end interoperability, strengthening the overall data infrastructure, building public trust around privacy and security, and smoothing over inconsistent state and local policies on data use and sharing are possible solutions.

Berwick wrote that if the country adopted these policy frameworks, healthcare quality and costs would likely improve dramatically within a decade.

“The devil is not in the details here,” wrote Berwick. “Everything the authors recommend can, in principle, be done with remarkably few cycles of trial and learning. The devil is in the culture. It is all about will.”

“Leaders must recruit the courage to make the case and put their own political and organizational futures on the line,” wrote Berwick.

 

California Employer Health Benefits: Prices Up, Coverage Down

http://www.chcf.org/publications/2017/03/employer-health-benefits?_cldee=aGVucnlrb3R1bGFAeWFob28uY29t&recipientid=contact-58e265c0591ce51180f7c4346bac4b78-22293f7225824dd0a2a16e01c6e7b1e7&esid=7e382ea0-c114-e711-80fa-5065f38a19e1

Since 2000, the percentage of employers offering health benefits has declined in California and nationwide, although coverage rates among offering firms have remained stable. Only 55% of firms reported providing health insurance to employees in 2016, down from 69% in 2000. These findings underscore the important role that Medi-Cal and Covered California play in providing insurance to working Californians — coverage that could be negatively impacted if the Republicans repeal and replace the Affordable Care Act.

Nineteen percent of California firms reported that they increased cost sharing in the past year, and 27% of firms reported that they were very or somewhat likely to increase employees’ premium contribution in the next year. The prevalence of plans with large deductibles also continues to increase.

California Employer Health Benefits: Prices Up, Coverage Down presents data compiled from the 2016 California Employer Health Benefits Survey.

Other key findings include:

  • Health insurance premiums for family coverage grew by 5.6%. Family coverage premiums have seen a cumulative 234% increase since 2002, compared to a 40% increase in the overall inflation rate.
  • The average monthly health insurance premium, including the employer contribution, was $597 for single coverage and $1,634 for family coverage in California, and was significantly higher than the national average.
  • 41% of workers in small firms faced an annual deductible of at least $1,000 for single coverage, compared to 17% of workers in larger firms. The prevalence of these higher deductibles in small firms has increased substantially in the past five years.
  • Only one in four firms with many low-wage workers (those earning $23,000 or less) offered health coverage to employees in 2016.
  • In the past year, 24% of large firms extended eligibility for health benefits to workers not previously eligible.

The complete Almanac report, as well as past editions, is available under Document Downloads.

Fitch: Uncompensated care could increase next year under ACA

http://www.beckershospitalreview.com/finance/fitch-uncompensated-care-could-increase-next-year-under-aca.html

Image result for uncompensated care

Without modifications to the ACA, exchange enrollment could suffer and hospitals are likely to see uncompensated care rise next year, according to Fitch Ratings.

Last Friday, the GOP’s proposal to repeal and replace the ACA was pulled from the House floor, leaving the ACA in effect for the time being.

Hospitals are not expected to see a rise in uninsured patients this year since those enrolled in an ACA plan for 2017 will keep it, Fitch said in a news release. However, with premiums rising and insurers leaving the exchanges, ACA enrollment is likely to decrease, the agency noted. Total signups for open enrollment fell 4 percent from 2016 to 2017.

“The failure of the AHCA [American Health Care Act] to move forward means that the ACA exchanges will be ostensibly functioning in 2018, but hospital companies will likely face higher levels of uncompensated care as fewer individuals enroll in exchange products,” Fitch said.

Still, Fitch said it is the ACA’s Medicaid expansion — not the exchanges — that have primarily driven a decrease in uncompensated care for hospitals.

“The AHCA’s changes to the ACA related Medicaid expansion were relatively more benign than the expected dislocation in the exchange covered lives with respect to the ultimate influence on hospital companies’ patient payer mix and the financial burden of treating uninsured patients,” Fitch said. “However, while current Medicaid enrollment is likely to be stable, more states will not likely expand eligibility given the uncertainty of future funding.”

Faith-based providers likely to keep pension regulation exemptions

http://www.modernhealthcare.com/article/20170327/NEWS/170329932/faith-based-providers-likely-to-keep-pension-regulation-exemptions

Image result for supreme court

The U.S. Supreme Court on Monday appeared skeptical of arguments that they should subject faith-based health systems to federal pension regulations.

The eight justices considered three cases on Monday involving Advocate Health Care, St. Peter’s Healthcare System and Dignity Health where federal appeals courts determined the faith-based systems did not qualify for a so-called “church plan” exemption from the Employee Retirement Income Security Act. For three decades, the Internal Revenue Service, Department of Labor and Pension Benefit Guaranty Corp. have treated faith-based organizations’ pension plans as exempt from ERISA.

If the appellate decisions are upheld, the health systems and other large and small faith-based organizations will have to comply with ERISA’s disclosure rules, fully fund their pension plans and pay PBGC premiums. The decision could affect the retirement benefits of more than a million employees around the country.

The systems say their pensions are well funded but a ruling against them could force them to pay billions in penalties in the lawsuits. The systems have said that would result in them being able to provide less charity care or eliminate their pension plans altogether.

“Countless” pension plans have been structured based on faith-based organizations’ beliefs that they fell under this church plan exemption, relying on hundreds of letters from the Internal Revenue Service, Department of Labor and PBGC that affirmed that status, according to the health systems’ counsel Lisa Blatt. Reversing that longstanding practice would “unleash a torrent of unintended consequences,” she told the eight justices.

The health systems have argued that Congress intended to allow church agencies – including health systems, schools and other organizations supporting the church’s religious mission – to create their own ERISA-exempt pension plans.

Although several justices questioned whether the underlying congressional statute supports that argument, Chief Justice John Roberts and Justice Sonia Sotomayor both pointed out that the federal agencies obviously had a similar reading of the law.

Similarly, Justice Anthony Kennedy noted the faith-based systems relied in good faith on the federal agencies’ interpretation.

But pension beneficiaries are concerned that this provides massive corporations like Dignity – one of the largest health systems in the country – with an unfair advantage over its competitors that Congress never intended. Faith-based organizations don’t have to insure their plan’s benefits, meet ERISA vesting requirements or clarify rights to future benefits.

“(Congress) wanted a close tie between the church and plan,” the beneficiaries’ counsel James Feldman said during oral arguments Monday. If the church isn’t involved in the pension plan, there’s no reason an organization should receive ERISA exemption, he said.

The federal government has sided with the hospitals, with Deputy Solicitor General Malcolm Stewart telling the justices that Congress expanded the church plan exemption in the 1980s to include church-affiliated organizations’ pension plans after the IRS denied an exemption in the 1970s.

 

New integrated model of care for seniors lowers hospitalizations, readmissions, emergency care visits

http://www.fiercehealthcare.com/healthcare/new-integrated-model-care-for-seniors-lowers-hospitalizations-readmissions-emergency

Nurse with patient

The clinical outcomes of a new integrated model of care for frail seniors that bridges housing and healthcare are so significant that researchers believe the program has the potential for substantial Medicare cost savings.

The model provides residents with onsite, comprehensive therapy, medical care, pharmacy, and lab services. Key components to the program include a care navigator who coordinates the residents’ total care and high-tech/high-touch communications that transfer the resident’s information to ancillary and acute care services through an electronic health record.

Although Juniper Communities’ residents were older and more cognitively impaired than the overall Medicare population with similar conditions, independent researchers from Anne Tumlinson Innovations looked at 2012 Medicare Beneficiaries Survey, as well as those living in senior housing that didn’t provide an integrated healthcare program, and found Juniper’s Connect4Life program had:

  • 50% lower inpatient hospitalization rates
  • 80% lower readmission rates
  • 15% lower rate of emergency department use

“I thought the results might be good but you never know until you get the data. But I didn’t expect the significance of the results,” Lynne Katzmann, Ph.D., founder and president of the Bloomfield, New Jersey-based operator of senior communities in New Jersey, Pennsylvania, Florida and Colorado, told FierceHealthcare this morning in an exclusive interview.

“The results show when you provide supportive housing and services and integrate with clinical care services you can avoid high utilization of the highest cost services,” said Katzmann, noting that it has the potential to address population health among the 5% who use 50% of healthcare resources.

8 hospitals planning facility upgrades, expansions

http://www.beckershospitalreview.com/facilities-management/8-hospitals-planning-facility-upgrades-expansions-32317.html

The following hospitals announced or completed plans in the last week to expand, upgrade or renovate their facilities.

1. Kaiser Permanente opens 11th CareClinic in Washington
Oakland, Calif.-based Kaiser Permanente opened a CareClinic at a Bartell Drugs pharmacy in Des Moines, Wash.

2. Memorial Hermann to open new hospital March 31
Houston-based Memorial Hermann will open an 81-bed hospital in Cypress, Texas, March 31, according to Community Impact Newspaper.

3. Rapid City Regional Health to build $55M orthopedic hospital, sports medicine facility
Rapid City (S.D.) Regional Health will build a $55 million orthopedic hospital and sports medicine center next to its competitor, Black Hills Orthopedic & Spine Center, KOTA Territory News reports.

4. Cincinnati Children’s Hospital Medical Center plans expansion
Cincinnati Children’s Hospital Medical Center plans to expand its main campus by an additional 625,000 square feet, according to a WCPO report. 

5. Portsmouth Regional Hospital doubles number of psychiatric beds
Portsmouth (N.H.) Regional Hospital, which houses a 30-bed behavioral health unit, temporarily doubled the number of its involuntary inpatient beds to decrease wait times for mental health patients. 

6. St. Joseph’s Health opens clinic dedicated to heartburn
Syracuse, N.Y.-based St. Joseph’s Health has opened The Heartburn Center at St. Joseph’s, the region’s first dedicated and comprehensive heartburn treatment center.

7. Southcoast Health to expand ED, inpatient capacity at Tobey Hospital
New Bedford, Mass.-based Southcoast Health will expand an emergency department and private inpatient rooms at Tobey Hospital in Wareham, Mass.

8. Norton Healthcare to invest $78M in children’s hospital expansion
Louisville, Ky.-based Norton Healthcare will invest $78.3 million into several expansion projects at Norton Children’s Hospital, according to WDRB.