Tag Archives: Hospital

Kaiser’s net income dips 35% to $653M

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https://www.beckershospitalreview.com/finance/kaiser-s-net-income-dips-35-to-653m.html

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Oakland, Calif.-based Kaiser Permanente reported higher revenue for its nonprofit hospital and health plan units in the second quarter of 2018, but the system ended the period with lower net income.

Kaiser’s operating revenue climbed to $19.6 billion in the second quarter of this year. That’s up 8 percent from revenue of $18.1 billion in the same period of 2017.

The boost was attributable, in part, to the system’s health plan unit. In the first half of 2018, Kaiser added 453,000 health plan members. As of June 30, Kaiser had 12.2 million members.

Kaiser’s expenditures in the second quarter of 2018 included capital spending of $735 million, which includes investments in upgrading and opening new facilities, as well as in technology. In the second quarter of this year, Kaiser opened five new medical offices in California, bringing the system’s total number of medical offices nationwide to 689.

Kaiser reported operating income of $345 million in the second quarter of this year, down 55 percent from $772 million in the same period of 2017.

After factoring in nonoperating income, Kaiser ended the second quarter of 2018 with net income of $653 million, down 35 percent from net income of $1 billion in the same period of the year prior.

 

 

 

For Cancer Centers, Proton Therapy’s Promise Is Undercut by Lagging Demand

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In March 29, Georgetown University Hospital opened a proton-therapy cancer unit that is expected to treat about 300 patients a year at premium prices using what its proponents promote as the most advanced radiology for attacking certain tumors.

At the facility’s heart is a 15-ton particle accelerator that bombards malignancies with beams of magnet-controlled protons designed to stop at tumors rather than shoot through them like standard X-ray waves, mostly sparing healthy tissue.

With the addition, Georgetown joined a medical arms race in which hospitals and private investors, sometimes as partners, are pumping vast sums of money into technology whose effectiveness, in many cases, has not yet been shown to justify its cost.

Although most of the proton centers in the United States are profitable, the industry is littered with financial failure: Nearly a third of the existing centers lose money, have defaulted on debt or have had to overhaul their finances.

For Georgetown officials, it was still a bet worth making.

“Every major cancer center that has a full service radiation oncology department should consider having protons,” said Dr. Anatoly Dritschilo, the chief of the hospital’s radiation medicine department.

Many have. There are 27 proton therapy centers now operating in the United States. Nearly as many are being built or planned. Georgetown’s, which vies for patients with a struggling unit in Baltimore, will soon compete with another in Washington and one in Northern Virginia.

But about 30 years after the Food and Drug Administration first approved proton therapy for limited uses, doctors often hesitate to prescribe it and insurers often will not cover it.

That means there simply may not be enough business to go around.

“The biggest problem these guys have is extra capacity,” said Dr. Peter Johnstone, the chief executive at Indiana University’s proton center before it closed in 2014, in need of an upgrade but lacking the potential patients to pay for it. “They don’t have enough patients to fill the rooms.”

At Indiana, he added, “we began to see that simply having a proton center didn’t mean people would come.”

Proton therapy was initially used to treat tumors in delicate areas where surgery was not an option — near the eye, for example — and in children, and it remains the best choice in such cases.

But its pinpoint precision has not been shown to be more effective against breast, prostate and other common cancers. One recent study of lung-cancer patients found no significant difference in outcomes between people receiving proton therapy and those getting a focused kind of traditional radiation, which is much less expensive. Other studies are still underway.

“Commercial insurers are just not reimbursing” for proton therapy except for pediatric cancers or tumors near sensitive organs, substantially limiting the potential treatment pool, said Brandon Henry, a medical device analyst for RBC Capital Markets.

Medicare covers proton therapy more readily than private insurers, but relying solely on Medicare patients does not allow backers of some treatment centers to recoup their investments, much less turn a profit, analysts said.

For a glimpse of what can go wrong, consider the Maryland Proton Treatment Center in Baltimore, which is affiliated with the University of Maryland Medical Center.

Opened two years ago with a “Survivor”-themed party and lofty financial goals, the unit is already undergoing a restructuring that is inflicting large losses on its outside investors, including wealthy families from Texas.

Before the Baltimore center opened, those behind it saw their market stretching from Philadelphia to Northern Virginia and encompassing 20,000 potential patients a year. Officials predicted the unit would treat “north” of its current rate of about 85 patients a day, said Jason Pappas, the acting chief executive.

How far north?

“Upper Canada,” said Mr. Pappas, declining to provide hard numbers. He said the center would break even by the end of the year.

The patient shortage might not be a good sign for projects in the pipeline, but it is encouraging for those who take a dim view of proton therapy’s rise.

“Something that gets you the same clinical outcomes at a higher price is called inefficient,” said Dr. Ezekiel Emanuel, a health policy professor at the University of Pennsylvania, which operates one proton center and is developing another. “If investors have tried to make money off the inefficiency, I don’t think we should be upset that they’re losing money on it.”

The proton therapy boom effectively began in 2001, when Massachusetts General Hospital in Boston opened a proton unit, raising the profile of what was a little-used technology. By 2009, developers were flocking to the field, lured by the belief that insurers would cover treatment bills that run to $48,000 and more.

The treatment held particular promise for prostate cancer patients, given the potential side effects, including incontinence and impotence, associated with traditional radiation.

But a 2013 Yale study found little difference in those conditions among patients getting proton therapy versus those getting traditional radiation. Within a year, several insurers stopped covering the therapy for prostate cancer or were reconsidering it.

Indiana University’s center was the first to close. Before long, others were in dire financial straits.

California Protons in San Diego, which was once associated with the Scripps Health hospital network, filed for bankruptcy protection last year. An abandoned proton project in Dallas is in bankruptcy as well.

In Virginia, the Hampton University Proton Therapy Institute has lost money for at least five straight years, financial statements show. In Knoxville, Tenn., the Provision CARES Proton Therapy Center lost $1.7 million last year on revenue of $23 million, $5 million short its target.

Centers in Somerset, N.J., and Oklahoma City run by privately held ProCure have defaulted on their debts, according to the investment firm Loop Capital. A center associated with Seattle Cancer Care Alliance, a hospital consortium, in Washington State lost $19 million in the 2015 fiscal year before restructuring its debt, documents show. A center near Chicago lost tens of millions of dollars before its own restructuring as part of a 2013 sale to hospitals now affiliated with Northwestern Medicine, according to regulatory documents.

Scott Warwick, executive director of the National Association for Proton Therapy, a trade group, blames “over-exuberant expectations” for the problems.

“I think maybe that’s what went on with some of the centers,” he said. “They thought the technology would grow faster than it has.”

The industry is using advertising and marketing to urge patients and lawmakers to press insurers to pay for proton therapy. Oklahoma recently passed a law requiring that insurers evaluate the treatment on an equal basis with other therapies. Virginia has considered similar legislation. At the National Proton Conference in Orlando last year, a full day was devoted to winning over insurers. The Alliance for Proton Therapy Access, another industry group, has software for generating letters to the editor demanding coverage.

Until the insurance outlook changes, those developing new proton centers have scaled back their ambitions. Georgetown’s unit, for example, cost $40 million and has a single treatment room. The one in Baltimore cost $200 million and has five.

Following the Georgetown model, with one or two treatment rooms, should allow centers in major metropolitan areas to make money, said Prakash Ramani, a senior vice president at Loop Capital, which is involved with projects in Alabama, Florida and elsewhere.

Not all the new units are small. In some cases, hospitals are joining forces to make the finances work. In New York, Memorial Sloan Kettering, Mount Sinai Health System and Montefiore Health System have teamed up on a $300 million unit with an 80-ton particle accelerator and four treatment rooms that is set to open in East Harlem next year.

Officials, counting on the New York area’s vast population and referrals from three major health systems, expect the center to treat 1,400 people a year. They will soon learn whether their project fares better than the Indiana proton center did.

“What places need now are patients,” Dr. Johnstone, that center’s former chief, said, “a huge supply of patients.”

 

 

Increase in uncompensated hospital care could be one effect of short-term coverage rule

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https://www.healthcarefinancenews.com/news/increase-uncompensated-hospital-care-could-be-one-effect-short-term-coverage-rule?mkt_tok=eyJpIjoiWVdZNE1URmxNREk1T1RsbCIsInQiOiIrbiszc25vVXhkU1NvMkJadnRGTEJhQnNYRDNBcmwyTmFHdnhVem5aS1lZT1wvSkhXYUZqOHNTQTlzZU5iaWtWYjZpN3FydGtadm5Ic1MzMFJwMnFsQWpWWFRZVEdJYkxNM3F4S0QzbHJqSDNSM09iK09tZFZaWTEyWkY0YVIyZGoifQ%3D%3D

Short-term limited duration plans finalized by the Trump Administration on Wednesday could subject patients to catastrophic medical bills and medical bankruptcy, stakeholders told the Departments of Health and Human Services, Labor and Treasury in commenting on the final rule.

Enrollees suffering acute health emergencies, debilitating injuries that lead to permanent disabilities, or the onset of chronic conditions could end up facing financial hardship until they can enroll in an individual or group market plan that provides the coverage they need, according to the final rule.

The rule extends short-term, limited duration coverage from three months to a year, with extensions available for up to three years.

Devastating for hospital ERs

America’s Health Insurance Plans said it was concerned the new plans could catch some consumers unaware and facing high medical expenses when the care they need isn’t covered or exceeds their coverage limits.

Hospitals could be affected by an increase in uncompensated care because the plans are not qualifying health plans mandated to cover the essential benefits of the Affordable Care Act, those commenting on the final rule said.

Stakeholders said the proposed changes could have a devastating impact on hospital emergency rooms, since ERs are required to provide care regardless of coverage status or one’s ability to pay.

“In addition, the lack of coverage of essential health benefits may also lead to an increased reliance on emergency departments as consumers delay or do not seek primary care, exacerbating existing acute and chronic conditions,” the final rule said.

One commenter said this may also lead to increased boarding of mental health patients in emergency departments, where some have an average stay of 18 hours.

If a short-term, limited-duration insurance policy excludes treatment in hospital emergency rooms, there is the possibility that there could be increases in uncompensated care provided by hospitals, according to the departments which issued the rule.

However, there is no reason to believe that all short-term, limited-duration insurance policies will exclude such coverage, the rule said.

In addition, short-term limited duration plans could result in a decrease in uncompensated care if people who otherwise had no insurance become insured.

Many commenters expressed concern that extending the maximum duration of short-term, limited-duration coverage would weaken the single risk pools and destabilize the individual market by syphoning young, healthy individuals from ACA plans. This would leave on the exchanges only those with higher expected health costs and those receiving subsidies in the individual market.

An estimated 70 percent of ACA enrollees receive a subsidy of a premium tax credit.

The departments acknowledge that relatively young, healthy individuals in the middle-class and upper middle-class whose income disqualifies them from obtaining premium tax credits  are more likely to purchase short-term, limited-duration insurance.

“As people choose these plans rather than individual market coverage, this could lead to adverse selection and the worsening of the individual market risk pool,” the rule said.

It could also result in higher premiums for some consumers remaining in the Affordable Care Act market as healthier consumers choose short-term plans and their lower premiums, the rule said.

Individuals who choose to purchase short-term, limited-duration insurance are expected to pay a premium that is approximately half of the average unsubsidized premium in the exchange.

Mixed results

Individual market premiums increased 105 percent from 2013 to 2017, in the 39 states using Healthcare.gov in 2017, while the average monthly premium for the second-lowest cost silver plan for a 27-year-old increased by 37 percent from 2017 to 2018.

Premiums for unsubsidized enrollees in the exchanges are expected to increase by 1 percent in 2019 and by 5 percent in 2028.

In 2019, when the short-term plans go into effect, enrollment in these plans will increase by 600,000. About 100,000 of these consumers will have been previously uninsured.

Enrollment in the ACA exchange in 2019 is expected to decrease by 200,000.

By 2028, enrollment in individual market plans is projected to decrease by 1.3 million, while enrollment in short-term, limited-duration insurance will increase by 1.4 million, according to the final rule.

The net result will be an increase in the total number of people with some type of coverage by 0.1 million in 2020 and by 0.2 million by 2028.

Benefits of short-term plans include increased profits for insurers of these plans and potentially broader access to providers compared to ACA market plans.

Short-term plan shortcomings include high deductibles and cost-sharing requirements.

For example, in Phoenix, Arizona, the out-of-pocket cost-sharing limit for a 40-year-old male can be as high as $30,000 for a 3-month period. Another commenter pointed out that in Georgia, a plan had a 3-month out-of-pocket limit of $10,000, but did not include the deductible of $10,000, resulting in an effective 3-month out-of-pocket maximum of $20,000.

ACA plans also have high premiums and out-of-pocket costs, the rule said. In 2018, deductibles average nearly $6,000 a year for bronze single coverage and more than $12,000 a year for bronze family coverage.

Matt Eyles, president and CEO of America’s Health Insurance Plans said, “Consumers deserve more choices, particularly those who do not qualify for federal subsidies and must pay the full premium.  Consumers should clearly understand what their plan does and does not cover. The new requirement for short term plans to make clearer disclosures to consumers is an important improvement. We also appreciate that the rule affirms the role of states to regulate these plans, including the option to reduce the duration period for short-term coverage.”

 

 

MARKET SHARE STILL MATTERS: 3 WAYS TO WIN

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https://www.healthleadersmedia.com/strategy/market-share-still-matters-3-ways-win

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For CEOs, market share is critical. But measurement of it, and tactics to grow it, are getting more complicated as patients connect with providers in more sophisticated ways.

Health system CEOs have always worked to meet their mission of caring for the poor and underserved and improving the health of their community. They often cite that mission as their top priority. But in truth, they are evaluated by how well they grow revenue and margin, both of which come through expanding market share.

Market share used to be easy to define. CEOs counted on a reliably increasing reimbursement model that exceeded inflation and an aging population that meant more hospital days every year. No longer. But even though market share growth is much more complex now, failing to achieve that growth could mean termination.

To win the market share battle, healthcare organizations must first redefine what it is (see the sidebar on new market share proxies) and then build strategies that take advantage of the shifts in healthcare delivery. Here’s how three healthcare leaders are doing it.

NORTHWELL: ‘THE CONSUMER IS THE DETERMINANT OF SUCCESS’

Michael Dowling, president and CEO of Northwell Health in Great Neck, New York, acknowledges the need to provide access, value, and convenience for consumers who are increasingly looking for a wide-ranging array of services offered by a single health system. The key to this strategy is the consumer as the focal point of healthcare decision-making.

Northwell is currently investing heavily in home health and digital care access, including a major initiative in telemedicine, but tying it all together into a seamless consumer experience is critical.

“You need hospitals as anchors, but the strategy is very consumer-focused in providing access and convenience,” Dowling says. “We’ve been doing this for 10 years, and it’s one of the reasons we’ve grown to being one of the biggest players in the New York City market. It’s the interconnection of all these pieces that makes all the difference.”

Although it’s not a perfect analogy, Dowling says Northwell wants to emulate Starbucks’ approach to market coverage. It’s not a location on every street corner, but it’s close.

“The traditional way of looking at market share isn’t valid anymore.”

—Chris Van Gorder

Also, getting critical market share mass in a variety of modalities is necessary to becoming the viable narrow network that employers and insurers are looking for. Smart health systems are spending more on smaller facilities, like micro-hospitals, or on freestanding ERs, homecare, urgent care centers, and telehealth capabilities. Such investment aims to meet the everyday health needs of consumers, not just provide for their increasingly rare inpatient stays.

This means focusing on organic growth that complements or even stands alone from the inpatient realm rather than buying hospitals, for example. Specialized areas of investment in both inpatient and outpatient care are the usual profitable service lines, such as orthopedics, neurology, and cardiac care, says Dowling.

He says he seeks two kinds of market share when it comes to reimbursement: Medicare and Medicaid, and commercial. Both kinds are needed to serve the community comprehensively, he says, but only one of the two makes a margin. Patients don’t see that distinction, though, and Northwell must serve them all.

“[Commercial] is what everyone’s going after,” he says. “So, you try to be the preferred provider. You take market share from competitors by developing the physician relationship and by the expansion of ambulatory. We’ve built a massive ambulatory network with over 650 locations. It’s a marketing and consumer experience strategy. If patients are not happy with experience, they will go somewhere else, so it’s multifaceted.”

Hospital-centric organizations used to measure market share in terms of inpatient volume or discharges, but as more services have moved outside the hospital environment, those have become less reliable measures of success.

“We’re all moving toward understanding that the consumer is the determinant of success, rather than just the patient care business,” says Dowling. “The consumer is going to be determining how they want care and where, and since more of it is not needed in the hospital, you have to create locations for cancer care and imaging and surgery where it can be done on an ambulatory basis.”

SCRIPPS: ACCENTUATE YOUR STRENGTHS

Chris Van Gorder, the longtime president and CEO of Scripps Health in San Diego, is content with a level of uncertainty around market share, and says that growing it depends partially on instinct in a time of upheaval.

“Market share’s an odd thing. Everyone still wants to gain commercial market share, of course,” he says. “But today we’re not so focused on the inpatient side. We’re doing total hips on the ambulatory side. So, the traditional way of looking at market share isn’t valid anymore.”

Even though the discharge-based methodology isn’t as relevant as it used to be, it’s still important. Rating agencies still use discharges as an important tool to measure financial health, and with the relative lack of precise alternatives, discharges can be an important factor in how they determine borrowing capacity and interest rate terms for healthcare organizations.

“As an industry, we have to figure that out,” Van Gorder says. “Rating agencies use discharges, but you could be reducing that number and getting stronger as an organization.”

Scripps went through its rating agency sessions about three months ago and has seen a small decline in those traditional market share measures, but Van Gorder says those measures don’t tell the full story anymore. Scripps’ market is dominated by three major players: itself, Kaiser Permanente, and Sharp HealthCare, so fluctuations in discharges are often small and at the edges.

Rating agencies are smart enough to recognize that healthcare is changing, Van Gorder says. For example, they know it’s the right strategy to move to ambulatory, and Scripps experienced growth in covered lives in its health plan, which is part of Scripps’ strategy to build its own narrow network. But even rating agencies are frustrated that there’s no metric to enable consistent comparisons, he says.

“We still talk about market share because I still need to make sure the hospitals are occupied enough. Half-full hospitals are the fastest way to go bankrupt,” he says.

Scripps is strong in cardiovascular services, particularly interventional cardiology. “So, we focus on maintaining our strength in that area and in ortho, which is becoming much more ambulatory than it used to be,” says Van Gorder.

One area where it’s not as strong is cancer, he says, even though Scripps is a major oncology provider in San Diego. To maintain and even buttress that market share, the health system has partnered with Houston’s MD Anderson Cancer Center to build a new comprehensive cancer program that started treating patients this summer.

“[MD Anderson] is building a network strategy, and they have 23,000 people just working on cancer, so we are taking advantage of their knowledge to make us stronger,” he says. “It was a market share play, but it’s much more than just that, with increased access to research and clinical trials.”

Facing fierce competition in ambulatory, Van Gorder says the health system is focusing on areas where it’s strongest and trying to grow there.

In all areas, he says Scripps must aggressively focus on cutting costs, because he sees cost as a proxy for quality. In fact, he notes, cost may be the major limitation for most health systems in growing market share for the foreseeable future.

“People are paying more out of pocket to come in, and insurance companies have gotten so good at narrow networks,” he says. “People tell me you can’t lead with cost, and I say no. Cost is a quality indicator.”

GRADY: INVESTING IN SPECIALTY SERVICES

Safety-net hospitals, such as Grady Health System in Atlanta, have historically been overrun by mission patients—that is, patients who do not bring margin, such as Medicaid patients. But its leadership has recognized that the health system needs to be more competitive in commercial patients.

For Grady, that hasn’t meant investment in traditional service lines, but instead investment in highly complex tertiary and quaternary services that can’t easily be found elsewhere in its market, says John Haupert, its president and CEO. With seed funding from philanthropic sources, Grady has made multimillion-dollar investments in stroke and neurological surgery, interventional cardiology, and surgical subspecialties.

“In our case, it was a matter of survival. If all your patients are Medicaid or unfunded, you’re not going to be in business. Part of Grady coming back to life 10 years ago involved developing strategies to grow in funding the mission,” says Haupert.

The complex cases that have come from Grady’s recent investments weren’t previously present in the market. Unlike many organizations, Grady needed to create additional inpatient capacity to maximize those investments in capital and talent. It will soon be operating around 700 occupied beds; 10 years ago, it was barely operating 400. It’s building new outpatient facilities as well, expanding ambulatory surgical and oncology capacity across the street to free up space in the main facility where its cancer center is now.

“In the next three years, we’ll have 750 beds in operation,” Haupert says. “We’ve gone from 9% to 20% commercial. That helps with sustainability.”

 

Pittsburgh council greenlights UPMC’s $400M expansion plan

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https://www.beckershospitalreview.com/facilities-management/pittsburgh-council-greenlights-upmc-s-400m-expansion-plan.html

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Although area residents, union members and community activists spoke out against the project, the Pittsburgh City Council approved Pittsburgh-based UPMC’s proposal for a $400 million expansion, according to a Tribune Review report.

Thirty-seven people spoke in opposition of UPMC’s plan to expand its Mercy complex in Pittsburgh during a discordant meeting July 31 that lasted more than five hours. The critics demanded the hospital giant allow employees to unionize, pay more in wages and accept all patients, including ones without insurance.

Despite objection, the city council approved the project in a 7-2 vote after a councilman negotiated with the hospital giant. In the negotiations, UPMC agreed to provide an addiction clinic, mental health services and job opportunities for minorities as it moves forward with its construction plans.

The $400 million project is part of a $2 billion systemwide expansion UPMC announced last year. Plans for UPMC Mercy hospital call for a vision and rehabilitation hospital that has a specialty research and treatment center for eye ailments.

“We look forward to moving ahead with construction of the UPMC Vision and Rehabilitation Hospital at UPMC Mercy and continuing our work on initiatives to benefit the Uptown and Hill District neighborhoods and residents,” Paul Wood, a UPMC spokesperson told the Tribune Review.

 

 

Independent monitor to oversee New Jersey hospital’s finances after 4-notch downgrade by Fitch

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https://www.beckershospitalreview.com/finance/independent-monitor-to-oversee-new-jersey-hospital-s-finances-after-4-notch-downgrade-by-fitch.html

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New Jersey Gov. Phil Murphy issued an executive order directing the state’s health commissioner to appoint an independent monitor to oversee expenditures and the level of care provided at University Hospital in Newark, N.J.

The action comes after the public hospital’s bond rating was downgraded four notches by Fitch Ratings due to financial difficulties. The hospital also recently received a failing grade on quality of care from the Leapfrog Group and attempted to reduce its pediatric bed count without state approval, according to a press release from Mr. Murphy’s office.

“Given the scope of the problems found at University Hospital, these immediate actions are necessary to ensure the facility can continue providing the highest level of care to the community while it gets its fiscal house in order and improves its healthcare quality,’” said Mr. Murphy.

New Jersey Health Commissioner Shereef Elnahal, MD, appointed Judy Persichilli, BSN, RN, to serve as monitor. Ms. Persichilli is a veteran healthcare executive who most recently served as president of Livonia, Mich.-based CHE Trinity Health.

 

Top 5 Areas of Extreme Interest to Healthcare Executives

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http://www.managedhealthcareexecutive.com/mhe-articles/top-5-areas-extreme-interest-healthcare-executives?rememberme=1&elq_mid=2619&elq_cid=876742

What issues are currently of greatest strategic importance to hospital and health system executives? The Health Care Advisory Board research team conducted the “Advisory Board Research Annual Health Care CEO Survey” to find out.

“While the survey tests interest in a wide range of topics, issues related to margin management—whether through revenue growth or cost control—rose to the top for 2018. In a particularly notable contrast to years’ past, cost control eclipsed revenue growth as executives’ most urgent strategic priority for the year,” says Yulan Egan, practice manager, Advisory Board Research.

The nationwide survey of 146 C-suite executives was conducted between December 2017 and March 2018. This year, the researchers asked respondents to rate 33 issues on a scale of “A” to “F,” with “A” indicating the greatest interest in learning more from Advisory Board researchers about the topic.

Here are the top five areas of interest to hospital and health system executives, based on the survey.

  1. Preparing the enterprise for sustainable cost control

This is the No. 1 concern for hospital executives (62% said they were extremely interested). That’s a higher percentage than any other topic received in the last four years, and 5% higher than for any topic received in 2017.
“The focus on long-term sustainability reflects a belief among healthcare executives that today’s margin pressures are permanent and structural in nature,” says Egan. “As a result, the current focus on cost control does not center on the types of temporary campaigns organizations have historically pursued to weather an economic downturn or a sudden shift in reimbursement policy.  Instead, executives are looking for strategies to permanently bend the expense curve; doing so will require radical improvements to cost structure, such as redesigning staffing models, rationalizing service lines across their market, and even transforming their facility footprint,” she says.

2.  Innovative approaches to expense reduction

For the second year in a row, C-Suite executives voted this as the No. 2 area of interest (56% of executives were extremely interested)

The healthcare cost problem has executives looking to go beyond the tried-and-true cost strategies of the past, according to Egan.

“Of particular interest today are strategies for controlling expense growth while avoiding mass lay-offs and other major drivers of employee disengagement,” she says. “Executives are also exploring the need to invest in innovative new technologies—like artificial intelligence—to drive drastic improvements in productivity and efficiency.”

3.  Exploring diversified, innovative revenue streams

This number 3 area of interest (56%) has ranked near the top for the past two years.

“Executives increasingly believe that relying on conventional determinants of market share—such as competing for referrals from independent physicians—will be insufficient for driving necessary levels of revenue growth,” Egan says. “Instead, hospitals and health systems are shifting their focus to include nontraditional sources of growth, such as contracting directly with employers, commercializing intellectual property, and launching innovation hubs.”

4.  Boosting outpatient procedural market share

This response has also ranked near the top for the past two years, with 50% of executives being extremely interested in this topic this year.

Technology advancements, reimbursement shifts, high deductibles, and evolving patient expectations continue the outmigration of care away from the inpatient setting, according to the survey.

“With lower barriers to entry in the outpatient setting, health systems find themselves in an increasingly competitive landscape, despite having made heavy investments in ambulatory care in recent years,” Egan says. “Successfully securing and growing outpatient market share will require hospitals and health systems to compete on the basis of convenience, service, and affordability—not just their clinical capabilities or brand.”

5.  Meeting rising consumer demands for service

According to the survey, 50% of executives are extremely interested in this topic.

“As transparency in healthcare has grown thanks to services such as Yelp, service experience is becoming more important than ever before,” Egan says. “Hospitals and health systems are also facing pressure from a growing number of consumer-focused competitors who are raising the bar on experience before, during, and after episodes of care.”

The goal, according to Egan, is to not only meet—but exceed—consumer expectations. For this, “executives will need to think holistically about improving patients’ experience with their system, from the moment they search for a provider to the point at which they ultimately pay their bill,” she says.

 

Market Concentration Variation of Health Care Providers and Health Insurers in the United States

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https://www.commonwealthfund.org/blog/2018/variation-healthcare-provider-and-health-insurer-market-concentration?omnicid=EALERT%%jobid%%&mid=%%emailaddr%%

Market concentration will cause high prices

 

Over the past several decades in the United States, more and more health care providers and health insurers have consolidated, increasing their market power.1,2Highly concentrated markets have contributed to the growth in U.S. health care spending because they are associated with higher health care prices and insurance premiums, yet are not typically associated with higher quality of care.2-4 Given that states play a large role in regulating health care provider and insurer markets, it’s important to understand how concentration levels vary across the country, as well as examine the relative concentration levels between providers and insurers at the local level. Our previous research has shown that in markets with both high provider and insurer concentration, insurers have bargaining power to reduce prices, yet consumers and employers don’t usually benefit.5Regulators can use this information to determine if policies are needed to protect consumers, as well as employers that provide health benefits to their workforces.

To illustrate health care market concentration variability across the United States, we tabulated the market concentration of health care providers — hospitals, specialist physicians, and primary care physicians — and health insurers for each metropolitan statistical area (MSA) in 2016 using the methods and data described in the Appendix. Regulators classify markets into categories that range from unconcentrated to moderately concentrated to highly concentrated.6 We created a fourth category called “super concentrated,” to distinguish among the most concentrated markets (see the Appendix for details).

Market Concentration Levels Across the United States

When looking at market concentration levels across the United States, we found that, for both providers and insurers, the concentration levels varied, typically between two concentration categories (see table). For providers, the vast majority of the MSAs were at the concentrated end of the spectrum, either being highly concentrated (47.1%) or super concentrated (43.0%). By comparison, for insurers, almost all the MSAs fell into the middle categories, either being highly concentrated MSAs (54.5%) or moderately concentrated (36.9%).

When examining the relative concentration between providers and insurers, providers generally had the upper hand. Provider concentration was in a higher category relative to insurers in 58.4 percent of the MSAs, while the opposite was true in only 5.8 percent of the MSAs.

State and Federal Scrutiny Is Needed

This study shows that health care market concentration levels vary across the United States. To protect consumers and employers from high prices and premiums, state-level regulatory scrutiny — coupled with federal regulatory scrutiny — of potentially anticompetitive behavior is needed. State officials better understand the nuances of their local markets and are able to ascertain what steps, if any, may be required. For example, more populous MSAs may have lower measured concentration levels because they comprise more than one market. And even if a market is found to be highly or super concentrated, regulators should examine other competitive factors that may mitigate the potentially harmful impact of high concentration. These might include whether it is easy for competitors to enter a market or if there are economies of scale that might lead to lower costs.6 For example, as health care diagnoses and treatments become more complex, larger, more-integrated, and well-capitalized health care providers may be better equipped to lower costs and improve quality. Still, it is important for regulators to increase the likelihood that the benefits of consolidation ultimately flow to consumers and employers.

CMS terminates Idaho hospital’s Medicare contract

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https://www.beckershospitalreview.com/finance/cms-terminates-idaho-hospital-s-medicare-contract-072718.html

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CMS ended its provider agreement with Blackfoot-based Idaho Doctors’ Hospital July 20.

Under rules enacted last September, a healthcare facility must average at least two inpatients per day and an at least two-night average length of stay to be considered an inpatient hospital for Medicare reimbursement. In April, CMS determined Doctors’ Hospital is not primarily engaged in providing care to inpatients and does not meet the new federal requirements for Medicare participation. The agency subsequently sent Doctors’ Hospital a Medicare termination notice.

“To go from being OK just 18 months ago, when we had our last survey, to now being told that we don’t meet the CMS conditions of participation because of new interpretations of the regulations is just difficult to comprehend,” Dave Lowry, administrative manager at Idaho Doctors’ Hospital, told KIFI earlier this month. “Like any business that is regulated by government agencies, we fully expect there to be changes to rules and their interpretations, but this drastic level of change just goes to show how much uncertainty there is in healthcare right now.”

After receiving the termination notice from CMS, Doctors’ Hospital sent letters to all patients affected by the contract termination, a spokesperson told Becker’s Hospital Review.

“We have worked with other area hospitals who provide the same services, and our staff provides this information for any patients who call with questions on where to go for care,” the Doctors’ Hospital spokesperson said.

 

Rhode Island hospital workers encouraged to seek jobless benefits during lockout

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https://www.beckershospitalreview.com/human-capital-and-risk/rhode-island-hospital-workers-encouraged-to-seek-jobless-benefits-during-lockout.html

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United Nurses and Allied Professionals Local 5098, the union representing 2,400 workers at Rhode Island Hospital and Hasbro Children’s Hospital in Providence, is encouraging members to apply for unemployment during a lockout, according to WPRI.

The workers, which include nurses, technicians and therapists, began a three-day strike about 3 p.m. July 23. They were willing to return to work at 3 p.m. July 26. However, Lifespan said it will not allow the workers to return until July 27 because of a commitment to  temporary staff hired during the walkout.

Norman Farias, RN, executive vice president of UNAP Local 5098, told WPRI the union is encouraging workers to apply for unemployment for the 24 hours ending at 3 p.m. July 27 “because this is a day they would be working, and the hospital’s telling them they can’t.”

It is unknown whether workers’ claims will be approved by the Rhode Island Department of Labor and Training.

According to hospital officials, the union was notified about the hospitals’ four-day commitment to temporary staff on July 13.