Partially because of a push from Congress, CMS is easing its penalties for 30-day readmissions for hundreds of safety-net hospitals, according to NPR.
The penalties were established in 2012 under the ACA in an effort to boost patient care. CMS estimates hospitals will lose $566 million in the latest round of penalties that will be assessed over the next 12 months because patients ended up back in their facilities.
Safety-net hospitals, which serve a large number of low-income patients, have argued for years that these sanctions adversely affect them. They have argued that their patients are more likely to suffer complications and have a readmission through no fault of the institution, but rather because the patients can’t afford necessary medications or don’t have primary care physicians to monitor their recovery.
However, effective Oct. 1, lawmakers mandated that CMS consider the long-standing argument from safety net hospitals: that they shouldn’t be penalized or held to the same standard of readmission as other hospitals.
In a major change to its evaluation of readmission rates that took effect this year, CMS stopped judging each hospital’s readmission performance against all other hospitals. Rather, the agency assigned hospitals to one of five peer groups with similar percentages of low-income patients. To assess the penalties, Medicare compared each hospital’s readmission rates from July 2014 to June 2017 against the readmission rates of its peers to determine whether a penalty should be assessed and how much the penalty would be.
CMS will assess penalties or dock payments to 2,599 hospitals in fiscal year 2019, which begins Oct. 1. The penalties resulted from fiscal year 2018 readmissions.
However, the new evaluation method has shifted the burden of those punishments away from safety-net hospitals. Penalties levied against safety-net hospitals in fiscal year 2019 will drop by a fourth on average from fiscal year 2018, according to NPR.
“It’s pretty clear they were really penalizing those institutions more than they needed to,” Atul Grover, MD, executive vice president of the Association of American Medical Colleges, told NPR. “It’s definitely a step in the right direction.”
Franklin, Tenn.-based Community Health Systems subsidiary Health Management Associates has agreed to pay the federal government $262 million to settle fraudulent billing and kickback allegations.
The settlement resolves allegations that HMA billed government payers for inpatient services that should have been billed as less costly observation or outpatient services, paid physicians in exchange for referrals, and submitted claims to Medicare and Medicaid for falsely inflated emergency department facility fee charges.
HMA’s conduct occurred between 2003 and 2012, before CHS acquired HMA. HMA was facing multiple qui tam lawsuits and was the subject of criminal and civil investigations when it was acquired by CHS, and CHS cooperated with the government in its investigation.
“Since acquiring HMA in 2014, it has been our goal to resolve the government’s investigation into all of these allegations which occurred prior to the acquisition and which were already under investigation at the time of the transaction,” CHS said in a press release.
In addition to the $262 million settlement, HMA entered a nonprosecution agreement with the Justice Department. Under the NPA, the government agreed not to bring criminal charges as long as HMA and CHS cooperate with the investigation, report evidence of violations of federal healthcare offenses, and ensure their compliance and ethics programs satisfy the requirements of a corporate integrity agreement between CHS and HHS’ Office of Inspector General.
Under the settlement, Carlisle HMA, the HMA-affiliated entity that formerly operated Carlisle (Pa.) Regional Medical Center, agreed to plead guilty to one count of conspiracy to commit healthcare fraud. CHS divested Carlisle Regional in 2017.
“We are pleased to have reached the settlement agreements so we can move forward now without the burden or distraction of ongoing litigation,” said CHS. “As an organization, we are committed to doing our very best to always comply with the law in what is a very complex regulatory environment and to operate our business with integrity, ethical practices and high standards of conduct.”
University of Vermont Medical Center in Burlington has reached a tentative contract agreement with the union representing about 1,800 licensed practical nurses, registered nurses and nurse practitioners.
The three-year tentative agreement, reached Sept. 19, includes a 16 percent average base salary increase over the life of the contract, according to hospital officials. They said raises for ambulatory nurses will be retroactive to the first pay period in September.
Additionally, the Vermont Federation of Nurses and Health Professionals conceded on its previously proposed increases to certain shift differentials as part of the deal.
The tentative agreement comes after six months of bargaining and demonstrations by nurses, including a 48-hour strike in July. Both sides said they were pleased they were able to make progress.
“We are looking forward to implementing the many positive changes that result from the new contract, which will enhance patient care, provide additional support for nurses and allow for new opportunities to advance the nursing profession,” hospital officials told Becker’s.
Molly Wallner, lead negotiator for the union, said: “We are proud of the unity, strength and perseverance our nurses have shown. This has been a long and difficult road for all of us, and we are proud of what we have accomplished. Our fight for patient safety is not over, and we will continue that fight through the [state] legislature.”
Nurses are expected to vote on the tentative agreement soon.
U.S. nonprofit hospitals continue to struggle with operating margins, but key balance sheet metrics have improved, according to Fitch Ratings.
Fitch’s 2018 hospital median report, based on audited 2017 data, shows operating margins declined for the second consecutive year in every rating category. The 2017 median operating margin was 1.9 percent compared to 2.8 percent in 2016.
But the agency said key balance sheet metrics, such as days cash on hand, cash to debt and leverage, got better and are at all-time highs. For example, the median days cash on hand climbed from 195.5 in 2016 to 213.9 in 2017, and cash to debt increased to 159 percent from 142.8 percent year over year.
“Despite this apparent contradiction — which may be temporary in nature — the clear signal through the noise is that operating margins remain under pressure for the second year in a row, indicating ongoing stress in the sector,” Fitch said.
The agency said the ongoing operating margin struggles are attributable to salary and wage expense pressures, increasing pharmaceutical costs, and the shift from fee-for-service to value-based care.
Fitch finalized rating criteria changes for nonprofit hospitals revenue debt in January, which focus more on balance sheet strength compared to operating profitability. Even with declining operating margins, Fitch said its median rating for nonprofit hospitals remains ‘A.”
But “should operational pressures continue for an extended period of time, even strong balance sheets will begin to come under pressure,” said Fitch Senior Director Kevin Holloran.
The Illinois Supreme Court ruled Sept. 21 that non-profit hospitals in the state do not have to pay property taxes as long as the value of the charitable services they provide is equal to or greater than the taxes they would have paid, according to The Chicago Tribune.
The ruling was an affirmation of a lower court decision that previously upheld the constitutionality of the property tax exemption, which was challenged in the lawsuit against the Illinois Department of Revenue by Cook County taxpayer Constance Oswald.
“When you give these hospitals a pass on paying real estate taxes, people within the counties where the hospitals are located have to make it up,” Edward Joyce, Ms. Oswald’s lawyer, told The Tribune.
But advocates for nonprofit hospitals argued the law allows them to fully dedicate themselves to delivering care to underserved patients.
“For nonprofit hospitals, property tax exemption fosters [transformation] by permitting them to focus their time, energy, and financial resources on new strategies to better serve all of the residents of our state.” said A.J. Wilhelmi, president and CEO of the Illinois Health and Hospital Association. “Taxing nonprofit hospitals would hurt the communities they serve by diverting dollars that are better used to care for patients and to upgrade equipment, modernize facilities and hire needed staff.”
Philadelphia-based Temple University Health System saw its financial position improve in the 12 months ended June 30, according to recently released unaudited financial documents.
The health system reported revenues of $1.84 billion in fiscal year 2018, up from $1.75 billion in the year prior. The increase was attributable in part to higher net patient service revenue. Temple said inpatient revenue grew year over year due to increased acuity and improved payer mix at Temple University Hospital, and that higher outpatient revenue was attributable to growth of TUH’s outpatient pharmacy and higher outpatient volumes.
The health system’s operating expenses climbed 4.7 percent year over year to $1.83 billion in fiscal year 2018. Higher expenses related to supplies, pharmaceuticals, salaries and faculty support primarily drove the growth. However, those expenses were partially offset by lower costs attributed to TUH’s implementation of the Epic EHR system that took place in fiscal year 2017. The health system said it spent $15.1 million in fiscal 2017 on staffing needs related to the Epic go-live.
The health system ended the most recent fiscal year with operating income of $17.23 million, compared to operating income of $471,000 in the year prior, according to the financial documents.
The California Health Care Foundation recently published the latest edition in its wide-ranging Almanac series, California Emergency Departments: Use Grows as Coverage Expands. This timely publication is loaded with data that paint a detailed picture of broad trends in hospital emergency department (ED) care across the state. Recently, I talked about the Almanac’s findings with Kristof Stremikis, who directs CHCF’s Market Analysis and Insight team. Senior program officer Robbin Gaines produced the report as part of the team’s mission to promote greater transparency and accountability in California’s health care system.
Q: California’s 334 hospital emergency departments provide a vital service to every part of the state. How are they faring?
A:The biggest takeaway from our Almanac is that California EDs are serving significantly more patients than they were just 10 years ago. When we control for population growth, the rate of ED use has grown 33% over the last decade, from 280 to 371 visits per 1,000 residents per year. Visits are up regardless of the type of insurance a patient has. Now, there’s a lot to unpack and understand about these figures, but when we think about the future, it’s important to realize that we are likely to continue to see increased demand for emergency services as the population ages. From a policy standpoint, we need to double down on efforts to ensure patients have access to the care they need in the most appropriate setting, be that an emergency department or somewhere else.
Q: What’s behind the increase in emergency department visits?
A:We don’t exactly know why more people are showing up in California emergency departments, but we do know ED use has been on the rise for at least 30 years. Across the nation, emergency departments have long been a major source of care across all categories of patients. We also know that regardless of source of coverage, California’s public and private payers are covering more visits per enrollee than they were a decade ago.
Sometimes ED use cannot be avoided. A few data points in our most recent Almanac suggest that a significant proportion of the rise in ED visits is due to clinically necessary visits. When we look at the acuity of ED visits, moderate and severe symptoms — including life-threatening ones — constituted all of the increase over the past decade. The number of visits with low or minor acuity fell. That is a big deal. This happened as the number of Californians with Medicare and Medi-Cal increased substantially during this period, and these programs cover a lot of older and sicker Californians who are more likely to need emergency care.
We also know that some of this rise is attributable to visits that could have been avoided. Precisely identifying what portion of visits are avoidable is difficult, and we do not include an estimate in our Almanac. But we know they are there — public and private payers in California have been working hard for years to identify and prevent unnecessary ED use.
Q: How big a problem are avoidable visits? And why would someone go to the ED if they don’t need to?
A:Available research does not point to a precise percentage of ED visits that could be avoided. The most conservative definition classifies as avoidable things like visits for low-acuity mental health and dental issues. Using that methodology, perhaps 3% of ED visits in California did not need to happen. But other estimates are much higher, sometimes exceeding 70% in the commercial market. What is clearer are the reasons why patients go to the ED over other options. Some people can’t take off work when doctors’ offices are normally open. Others have limited or negative perceptions of alternatives. Researchers have found that there is also an increasing number of patients who are referred to the ED by their physician.
Q: The number of ED departments has stayed flat during this period of growth. How are hospitals handling the additional visits?
A: The number of dedicated ED spaces for individual patients, or “treatment stations,” has increased almost 30% over the last decade. In 2016, the average treatment station handled 1,846 patients, or approximately five visits per day, up from 1,656 patient visits in 2006. Despite a 44% increase in total ED visits between 2006 and 2016, the number of visits by patients who left without being seen fell by almost 15%. That is remarkable.
Q: The data show a lot of regional variation in ED use. Are some regions or health plans better than others at addressing ED challenges?
A: ED use does vary widely, from a low of 311 visits per 1,000 residents in Orange County to a high of 516 in the Northern and Sierra region. Patient characteristics (such as age, race, and income), lack of alternatives, and physician referral patterns may all play a role in the relatively high rates of ED use in certain parts of the state. Among the promising strategies that can be deployed regionally are increasing access to primary care services in rural areas through telehealth, providing outreach and case management to frequent users, and addressing the needs of patients with behavioral health and substance use disorders.
Q: The Almanac shows an increase in the percentage of ED visits that are for Medi-Cal beneficiaries, due in large part to the expansion of eligibility for the program. What else would explain why the percentage from Medi-Cal went up?
A: Medi-Cal paid for a larger proportion of California’s ED visits in 2016 than in 2006 because it now covers many more Californians. When we control for the number of beneficiaries covered by various programs, a Medi-Cal member is less likely to end up in an emergency room than someone covered by Medicare, though more likely than someone with private insurance. Regardless of insurance type, the number of visits per enrollee is increasing.
Though we did not include the data in our Almanac, the state closely tracks ED use among Medi-Cal beneficiaries on its monthly managed care performance dashboards. Elderly and seriously disabled beneficiaries remain the most likely to visit the ED, at almost twice the rate of the next highest group, which is the Medi-Cal expansion population. Fortunately, the rate among the expansion population has decreased over the last several years, from about 70 visits per 1,000 member months in January 2014 to around 50 in June 2017. This may reflect managed care plan efforts to connect new patients with primary care “medical homes.”
When we look at the acuity of ED visits, moderate and severe symptoms — including life-threatening ones — constituted all of the increase over the past decade. The number of visits with low or minor acuity fell. That is a big deal.
Q: Critics of the Affordable Care Act (ACA) cite increasing ED visits, especially from people in the expansion population, as evidence that the law isn’t working in California. Is that a fair criticism?
A: Both critics and proponents of the ACA probably agree that the law is complicated — and complicated reforms need to be carefully unpacked and evaluated over long periods of time. One of the law’s major goals was to expand access to insurance coverage, and on this measure the law has made tremendous progress. As of 2016, only 7% of California residents lacked health insurance. Expanding Medi-Cal was the cornerstone of that success.
Q: What’s being done to address avoidable ED use at a local level?
A: On the public side, the ongoing Whole Person Care pilot program in Medi-Cal is one example of where innovation is taking place on this issue — 17 of the 25 counties participating in the program have made it an explicit goal to reduce avoidable ED use. Just last week, 17 health systems, including several in California, announced a major initiative to reduce avoidable ED use among Medicaid beneficiaries. This is likely to include some combination of enhanced access to primary care, behavioral health care, and social services. On the private side, the issue of avoidable ED use has attracted the attention of California payers like Anthem, Blue Shield, and Kaiser Permanente for several years. These groups have also worked to increase access to primary care using medical homes that offer after-hours and weekend care.
Another approach involves targeting those patients who are frequent ED users. In California, one recent study suggested frequent users were less than 10% of the population but accounted for nearly one-third of the visits. Intensive case management, health coaching, and community support for high users are all promising interventions. Finally, specific case management programs for substance use disorder and mental health problems are being considered.
Q: A report like this Almanac is obviously limited by the data that is currently available. What additional data points would you like to have for future issues?
A: I think the most important metric to focus on is potentially avoidable use of the emergency departments rather than the overall number of visits. While the California data we report here certainly do capture the universe that includes avoidable use, it does not allow us to parse out the differences among the subsets. It is always helpful to have additional research to help identify this type of visit, the reasons why a patient decided to go to the ED, and the strategies that would be most effective at helping patients get their care in more appropriate settings.
Last year, Cigna Corp. and the New York hospital system Northwell Health discussed developing an insurance plan that would offer low-cost coverage by excluding some other health-care providers, according to people with knowledge of the matter. It never happened.
The problem was a separate contract between Cigna and New York-Presbyterian, the powerful hospital operator that is a Northwell rival. Cigna couldn’t find a way to work around restrictive language that blocked it from selling any plans that didn’t include New York-Presbyterian.
Integration and consolidation among health care providers and health plans has the potential to improve the coordination and quality of patient care. However, when markets become highly concentrated — served by a single or a few large health care organizations — competition is curtailed and health care prices and insurance premiums tend to rise.
In a Commonwealth Fund–supported study in Health Affairs, researchers explored the effect of market consolidation across California between 2010 and 2016 on outpatient visit prices and premiums for individual coverage on the Covered California marketplace. The study focused on two measures of consolidation: the percentage of physicians in practices owned by hospitals and the total market share controlled by hospitals, health plans, and physician practices in a particular area.
What the Study Found
The number of physicians in hospital-owned practices increased from 25 percent to 40 percent across select California counties between 2010 and 2016.
Hospital employment increased more steeply among specialists than primary care physicians. Among the specialties studied (i.e., cardiology, hematology/oncology, orthopedics, and radiology), employment rose to 54 percent from 20 percent. In comparison, primary care physician employment increased to 38 percent from 26 percent.
Premiums for individual coverage rose the most, by 12 percent, in areas with both high consolidation among hospitals and a high percentage of hospital-owned physician practices.
Prices of specialty outpatient visits were 9 percent higher in areas with 100 percent hospital-physician employment compared to areas with average levels. Prices of primary care visits were 5 percent higher in areas with high versus average hospital-physician employment.
Seven counties were identified as “hot spots,” or markets with concerning levels of health care mergers and consolidation that could be limiting competition.
The Big Picture
The significant price increases in California markets with high hospital-physician employment and hospital consolidation point to the need for careful scrutiny of health care mergers and acquisitions. Additional research is needed to determine if the price increases are tied to improvements in patient care. For instance, if care is more expensive because it is more comprehensive, then overall utilization and spending should decrease. At the same time, regulatory laws and actions may be needed to prevent some health care organizations from attaining unfair market advantages that shut out rivals and raise prices.
The Bottom Line
In California, hospital acquisition of physician practices, particularly in markets with limited hospital competition, is associated with higher prices for outpatient visits and higher insurance premiums on the individual marketplace.
How do you define a valuable employee? Is it experience or maybe work ethic? Do you see competence in a specific area as the be-all and end-all of determining employee value?
What about soft skills? Do they hold the same value when interviewing for a rock star engineer or strategist position? Well, they should.
While technical skills and other hard skills defined in the job description matter, it’s an employee’s people skills and a whole host of other personal attributes that are crucial for long-term success.
Most companies undervalue soft skills or the impact people development will have on an organization. They assume the hard stuff holds more weight and makes the business go around. In turn, when difficult personalities and egos emerge, when sudden change and uncertainty takes place, and when conflict seems inevitable, it’s the employees with the natural ability to communicate and respond to crisis who hold the most value.
When crafting the people elements for fostering a great company culture, here are eight employees you’ll want to consider hiring:
1. People who are active listeners.
Effective communication isn’t just about talking; it is also the ability to listen and understand what’s happening on the other side of the fence. The best people-centered employees will listen and reflect back what they hear to clarify (“What I hear you saying is …”), and they’ll ask questions to probe the other person’s feelings or opinions. This can be as simple as: “Tell me how you feel about this.”
2. People with emotional intelligence (EQ).
While IQ still remains the best predictor of job success, once you land a job and start thinking about increasing your role, managing multiple priorities, getting promoted, leading others, and navigating political landscapes, IQ will be begging for EQ to show up. Daniel Goleman, the foremost authority on emotional intelligence, has put together these nine important questions to help a person evaluate his or her emotional intelligence.
3. People with a high degree of patience.
People with patience have the capacity to process a situation about to go south, get perspective, listen without judgment to someone they disagree with, and hold back from reacting head on. Practicing this rare business virtue may mean deciding to sit on your decision. By thinking over things with a rational and level head, you’ll eventually arrive at a more sane conclusion. These are the people you want to build a company culture around.
4. People who avoid drama.
Employees with emotional intelligence have a clear advantage: they cut through the drama by telling the facts as they see them and how it affects them. Let me unpack that further: These people are able to diffuse an emotionally-charged moment with a calm demeanor, explain the outcome they’re hoping for, and ask for other ideas for solutions with an open mind. By hiring people with the ability to manage conflict, you’ll see more constructive, productive, and respectful discussions taking place, which can help resolve hairy situations to everyone’s satisfaction.
5. People who can manage their emotions.
Self-control (or “self-management”) is a personal competence developed in every person. The question behind self-control is: Can I manage my emotions and behavior to a positive outcome? Not everyone can. Daniel Goleman says this about people with self-control:
“Reasonable people–the ones who maintain control over their emotions–are the people who can sustain safe, fair environments. In these settings, drama is very low and productivity is very high. Top performers flock to these organizations and are not apt to leave them.”
6. People who reject the idea of multitasking.
Productive people are successful in managing their time because they avoid juggling many things. Research says multitasking is a myth and can be damaging to our brains. You end up splitting your focus over many tasks, losing focus, lowering the quality of your work and taking longer to hit your goals.
7. People who value and practice well-being during work hours.
Top employees are looking for companies that allow them to integrate work and life during their schedule, and the smartest bosses are giving them that flexibility because it makes business sense. One example is the workplace habit of taking short, frequent breaks. A 2016 study showed that hourly five-minute walking breaks (out in nature with a friend, for example) boosted energy levels, sharpened focus, and improved mood throughout the day. These “microbursts of activity” increase motivation and concentration and enhance creativity, according to researchers at Stanford University.
8. People who self-manage extremely well.
Forget time management –you want people who are good managers of “self.” By managing your life, tasks, and priorities efficiently, you can seamlessly transition to more productivity, higher work satisfaction, and better personal well-being. And that’s what the most valuable employees do to reach their most optimal level of self-management. For example:
As noted earlier, they don’t multitask or juggle too many things.
They start and end meetings on time, and don’t get sidetracked or allow the agenda to get hijacked.
They set boundaries and say no to people when needed, so their time is protected.
They identify the time of the day when they’re most productive and focus their energy on doing the most important things during those times.
They’re aware of time-wasters such as visitors dropping by their workspace to gossip; they ensure they don’t spend time in useless meetings, distracting phone calls, and anything that else that disrupts their state of flow.
Your turn: What traits or behaviors have you seen the most valuable employees exhibiting?
HENRY KOTULA 