Tag Archives: Hospital

The New War On Sepsis

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The New War On Sepsis

Dawn Nagel, a nurse at St. Joseph Hospital in Orange, Calif., knew she was going to have a busy day, with more than a dozen patients showing signs of sepsis. They included a 61-year-old mechanic with diabetes. An elderly man recovering from pneumonia. A new mom whose white blood cell count had shot up after she gave birth.

Nagel is among a new breed of nurses devoted to caring for patients with sepsis, a life-threatening condition that occurs when the body’s attempt to fight an infection causes widespread inflammation. She has a clear mission: identify and treat those patients quickly to minimize their chance of death. Nagel administers antibiotics, draws blood for testing, gives fluids and closely monitors her charges — all on a very tight timetable.

“We are the last line of defense,” Nagel said. “We’re here to save lives. If we are not closely monitoring them, they might get sicker and go into organ failure before you know it.”

Sepsis is the leading cause of death in U.S. hospitals, according to Sepsis Alliance, a nationwide advocacy group based in San Diego. More than 1 million people get severe sepsis each year in the U.S, and up to 50 percent of them die from it. It is also one of the most expensive conditions for hospitals to treat, costing $24 billion annually.

Most hospitals in the U.S. have programs aimed at reducing sepsis, but few have designated sepsis nurses and coordinators like St. Joseph’s. That needs to change, said Tom Ahrens, who sits on the advisory board of Sepsis Alliance.

“From a clinical point of view, from a cost point of view, they make a huge impact,” said Ahrens, a research scientist at Barnes-Jewish Hospital in St. Louis.

Trump Budget, Revised AHCA, Credit Negatives for NFP Hospitals

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The one-two punch of massive cuts to Medicaid that are proposed in both the new budget and the House Republicans’ revised American Healthcare Act would result in cuts of close to $1 trillion over 10 years, analysis shows.

Cutting Medicaid by more than $860 million over the next decade would be a credit negative for states and not-for-profit hospitals, both of which would be left scrambling for alternative funding to cover the loss, according to a new report from Moody’s Investors Service.

Last week the Trump administration unveiled a budget proposal that includes $610 billion in cuts to core Medicaid services, and an additional $250 million in reductions to Medicaid expansion programs created under the Affordable Care Act.

The following day, the Congressional Budget Office released its scoring of the revised American Health Care Act – the Republican plan to repeal and replace the Patient Protection and Affordable Care Act and estimated that it would reduce Medicaid spending by $834 million through 2026.

“The proposals significantly change the longstanding Medicaid financing system and are credit negative for states and not-for-profit hospitals,” Moody’s said in an issues brief.

For states that don’t have the luxury of ignoring budget imbalances, the changes would increase pressure to either kick people off Medicaid, increase the state share of Medicaid funding, or cut payments to hospitals and other providers, Moody’s says.

Hospitals, particularly those serving a high mix of Medicaid patients, could expect to see reimbursement cuts and more cases of uncompensated care as Medicaid patients lose the coverage they’d gained under the ACA’s expansion.

Medicaid is already a significant budget burden for states, consuming between 7% to 34% of state revenue and averaging 16%.

Under the ACA, bad debt expense at not-for-profit hospitals in states that expanded Medicaid eligibility declined on average by 15% to 20% since 2014, enhancing these hospitals’ cash flow. Similarly, the gains in insurance coverage lowered the nationwide uninsured rate to approximately 11%, with uninsured rates even lower in states that expanded their Medicaid rolls, Moody’s says.

“Although the budget would give states limited new flexibility to adjust their Medicaid programs, the measure overall reflects a significant cost shift away from federal funding to states,” Moody’s says. “This cost shift is significant and would force states to make difficult decisions about safety-net spending for hospitals that serve large numbers of indigent patients.”

NYC Health + Hospitals cuts 476 positions amid financial pressure

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Dive Brief:

  • NYC Health + Hospitals on Friday cut 476 management positions, which will reduce the current six layers of managers to four and is expected to save the health system $60 million, several news outlets reported.
  • The largest U.S. public health system cut 396 managers and eliminated 80 unfilled positions.
  • The system expects the job cuts to lead to $60 million in savings in fiscal year 2018.

Dive Insight:

The announcement of the health system’s massive restructuring day came after a $673 million loss was posted for Q3 2017. H+H interim President and CEO Stanley Brezenoff said in a statement the restructuring will reduce “unnecessary layers of management.” The health system will now be able to “better direct resources where we need them most —  at the front line of patient care.” It also cut 70 employees in February.

Revenue increased by 1.8% to $6.7 billion during the third quarter. Yet system officials said net patient service revenues dropped by 9%. The reasons behind the drop were “lower payments from the disproportionate share hospital (DSH) and upper payment limit programs,” according to the healthcare system of 11 hospitals.

At that time, H+H predicted that it would cut its $779 million budget gap this year and end with $185 million cash in hand. In April, the health system announced a redesign of its management structure after losing $776 million for the first half of FY 17, but said at that time that they did not expect layoffs.

Hospitals are facing financial issues across the country. Safety net hospitals like H+H may soon face even more difficulties. H+H has a large Medicaid population and potential cuts in President Donald Trump’s budget and the American Health Care Act – the GOP’s proposed bill to replace the Affordable Care Act – could send millions off of Medicaid. This would mean a system like H+H may soon face more uncompensated care.

H+H is looking for ways to improve its finances. One way is through a new Epic revenue cycle system that officials in May said will “improve efficiency and ensure that the health system is collecting the maximum amount of revenue for the services it delivers.” They expect it will improve clinical documentation, reduce claims denials and accelerate reimbursements.

Longitudinal Patient Care Remains a Challenge Despite Commitment to Value-Based Care Delivery Competencies

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Provider organizations’ ability to deliver longitudinal value-based care for patients remains a work in progress.

Survey results from the 2017 HealthLeaders Media Value-Based Readiness: Setting the Right Pace survey reveal that the majority of respondents currently demonstrate a broad commitment to developing care delivery competencies to prepare for value-based care.

For example, the top three care delivery areas that respondents say that their organization has committed to developing or has already developed competencies to prepare for value-base care are care coordination/guiding patients to appropriate care (79%), clinical integration (73%), and broader access to care (68%), and the top five areas all receive a response greater than 65%.

On the other hand, longitudinal patient care (40%) is low on the list of responses and is the only area below a 50% response, although its result is up nine points over last year’s survey.

The response for this critical area indicates the early stage at which most respondents currently reside in the transition to value-based care.

Note that as providers continue to commit to developing care delivery competencies to prepare for value-based care, longitudinal patient care will play an increasingly important role as providers manage patient care over longer periods of time and across multiple care settings.

Survey results also reveal that respondents are confident in their ability to deliver value-based care within the various areas of care delivery.

For example, 73% say that their level of ability is very strong (20%) or somewhat strong (53%) for broader access to care, 72% say that their level of ability is very strong (21%) or somewhat strong (51%) for clinical integration, and 72% say that their level of ability is very strong (20%) or somewhat strong (52%) for care coordination/guiding patients to appropriate care.

However, longitudinal patient care receives the lowest rating for respondent organizations’ ability to deliver value-based care in this area. For example, 54% of respondents indicate that this is very weak (11%) or somewhat weak (43%), an indication that it remains a work in progress for respondents.

Market power matters

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Market power matters

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It’s the clash of titans.

In January the Massachusetts the Group Insurance Commission (GIC) — the state agency that provides health insurance to nearly a half-million public employees, retirees, and their families — voted to cap provider payments at 160% of Medicare rates. Ignoring Medicare (~1M enrollees) and Medicaid (~1.6M enrollees), the GIC is the largest insurance group in the state.  According to reporting from The Boston Globe, the cap would be binding on a small number of concentrated providers, including Partners HealthCare, one of the largest hospital systems in the state.

David Anderson summed the development up perfectly.

The core of the fight is a big payer (the state employee plan) wants to use its market power to get a better rate from a set of powerfully concentrated providers who have used their market power to get very high rates historically.

Anderson also pointed to a relevant, recent study that illustrates how a specific payer’s and provider’s market power jointly affect prices. In Health Affairs, Eric Roberts, Michael Chernew, and J. Michael McWilliams studied the phenomenon directly, which has rarely been done. Most prior work aggregate market power or prices across providers or payers in markets.

Their source of price data was FAIR Health, which includes claims data from about 60 insurers across all states and D.C. In a county-level analysis, the authors crunched 2014 data for just ten of those insurers that offered PPO and POS plans and that did not have solely capitated contracts. These ten insurers represent 15% of commercial market enrollment. They then looked at prices paid by these insurers to providers in independent office settings for evaluation and management CPT codes 99213, 99214, and 99215. These span moderate length visits to longer visits for more complex patients and collectively represent 21% of FAIR Health captured claims.

They computed insurer market share based on within-county enrollment. They computed a provider group’s market share as the county proportion of provider taxpayer identification numbers (TIN) associated with that group’s National Provider Identifier (NPI) — basically the size of group in terms of number of physicians.

Some of the findings are illustrated in the charts below and are largely consistent with expectations. For all three CPT codes, insurers with greater market shares tend to pay lower prices. That’s shown just below. The biggest price drop occurs when moving from <5% to 5-15% market share. Greater market share than that is associated with still lower prices, but not by as much. For example, insurers with <5% market share pay an average of $86 for CPT code 99213; insurers with 5-15% market share pay 18% less and insurers with ≥15% just a few percent less than that. It’s roughly the same story for other CPT codes.

Healthcare Triage News: Knee Surgery Doesn’t Improve Outcomes, but We Still Do A LOT of Them

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Healthcare Triage News: Knee Surgery Doesn’t Improve Outcomes, but We Still Do A LOT of Them

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The news tells us that arthroscopic surgery for knee arthritis and meniscal tears isn’t worth it. Healthcare Triage told you that a while ago. What’s new? This is Healthcare Triage News.

 

Sema4, a Mount Sinai spinout, launches with a focus on genomics

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Sema4, a Mount Sinai spinout, launches with a focus on genomics

dna, genomics

New York City, New York-based Mount Sinai Health System has launched a new spinout company: Sema4.

The for-profit startup has been created from numerous parts of Mount Sinai’s Department of Genetics and Genomic Sciences and the Icahn Institute for Genomics and Multiscale Biology.

Pronounced “semaphore,” the company will utilize genomic and clinical data to transform overall clinical diagnostics. By combining everything from predictive modeling to open access data, it aims to be able to better treat and diagnose diseases.

Sema4 will be run by Eric Schadt, the chair of the Department of Genetics and Genomic Sciences and the founding director of the Icahn Institute for Genomics and Multiscale Biology.

Schadt initially came to Mount Sinai about five years ago and has since helped grow its footprint in big data and genomics. But the current landscape presented an opportune time to create Sema4.

As genomic testing becomes more complex, Schadt explained, it came down to a few questions for Mount Sinai: “How do we scale all of this? How do we aggregate and manage really large scales of data and compute on it? The decision was that it’s better done as an independent company still in partnership with Sinai,” he told MedCity in a phone interview.

Mount Sinai and Sema4 will continue to be heavily involved with each other. Sema4 is the provider of all genetic testing services for Mount Sinai. And Mount Sinai will play a key role in technology development, data mining and data integration for Sema4.

“We’ll have a very, very intimate relationship,” Schadt said. “But now we are an independent, for-profit company that is presently wholly owned by Mount Sinai.”

Mount Sinai has made a large investment in Sema4 and is currently the company’s sole investor. Over the next 12 to 18 months, the startup will use those funds to grow its business, particularly its sales and marketing teams.

But after time, Sema4 will begin raising additional capital to boost the genetic testing and data sciences portions of its business.

“Once we’re stood up as a company and have our footing that way, we’ll be in a better position to more aggressively pursue the information side, and that’ll take an even bigger investment,” Schadt said.

He did not share any specific numbers with MedCity about how much Sema4 will be looking to raise.

Currently, reproductive health is a major focus area for the startup. But moving forward, Schadt said Sema4 wants to increase its involvement in the oncology space. Additionally, the company has set its sights on using digital health tools to better engage patients.

Prior to Sema4, Mount Sinai’s AppLab and Mount Sinai Innovation Partners launched a startup called Responsive Health for app distribution platform RxUniverse.

Recipe for Successful Health System M&A: Ensure Focus on Execution of Transaction Does Not Undermine Key Long-Term Strategic Imperatives

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The evolving U.S. healthcare landscape, perhaps more now than ever before, requires that health system executives possess varied and deep skill sets. Not only must executives navigate the changing political and macroeconomic landscape, including the repeal-and-replace uncertainty, but in execution of their well-intentioned strategic transactions, health system leaders must remain focused on the original strategic imperatives and objectives to help ensure long-term, sustainable success. Of 140 surveyed participants, 61% believe their organization’s merger, acquisition or partnership activity will increase within the next three years.

Commonly, a decision is made to move forward on an appropriate strategic transaction and then senior leadership assigns a multidisciplinary deal team to consummate such. The majority (74%) of surveyed participants cite both financial/operational and clinical/care delivery equally as the primary objective when deciding to transact. Prior to commencement, successful healthcare organizations will have gone through a lengthy strategic planning process, developed a list of strategic imperatives and had such approved by their board of trustees. Some of these strategic imperatives may include: the Triple Aim, relevance/attractiveness with employers and payers, alignment of incentives, ability to manage the resulting organization as a system versus a loose federation, and the stickiness and sustainability of the resulting system.

A breakdown in the deal consummation process that results in the strategic imperatives not maintaining primacy but being subordinated or ignored may result in a nice press release or closing ceremony but when measured by the test of time, the transaction may not deliver expected and necessary sustaining strategic benefits. This is exacerbated in complex M&A transactions and strategic partnerships. Such complex transactions cannot be managed in a manner similar to important but more routine operational or capital initiatives (e.g., construction of a new bed tower or implementation of a staff reduction initiative) facing healthcare organizations. Senior leadership must help ensure that the strategic benefits of a transaction do not become deemphasized due to deal fatigue, completion of task bias, arbitrary deadlines, and other pressures that work against the deal team obtaining optimal outcomes.

Healthcare leaders must help ensure that the strategic imperatives are effective guardrails of the deal team’s efforts and not lost in the difficult and dynamic transaction negotiation and consummation process. A successful approach focuses less on arbitrary timelines or goals and embraces an accountability process that monitors the deal progress and documentation to help ensure a true north heading. Effective leaders must remain laser-focused on the strategic imperatives and not allow completion and execution of the deal to subordinate the foundation of the original strategic mandate.

As Healthcare Changes, So Must its CEOs, CFOs, COOs…

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To keep up with big changes in how healthcare is administered, financed, and organized, top leaders are finding a need for new talents and organizational structures.

To keep up with big changes in how healthcare is administered, financed, and organized, top leaders are finding a need for new talents and organizational structures.

Healthcare reform as a term has become so ubiquitous that it is almost indefinable. At first, and broadly, it meant removing the waste in an excessively expensive healthcare system that too often added to the problems of the people whose health it aimed to improve. Then it became legislative and regulatory, in the form of the Patient Protection and Affordable Care Act and its incentives aimed at improving the continuum of care and expanding the pool of those covered by health insurance.

Now, for many in the industry, healthcare reform has matured into a business imperative: the process of ingraining tactics, strategies, and reimbursement changes so that health systems improve quality and efficiency with the parallel goal of weaning us all off a system in which incentives have been so misaligned that neither quality nor efficiency was rewarded.

That leaders finally are able to translate healthcare reform into action is welcome, but to many health systems trying to survive and thrive in a rapidly changing business environment, the old maxim that all healthcare is local is being proved true. Making sense of healthcare reform is up to individual organizations and their unique local circumstances. Fortunately, there are some broad themes and organizational principles that are helpful for all that are trying to make this transition. What works in one place won’t necessarily work in another, but the innovation level is off the charts as healthcare organization leaders reshape what being a leading healthcare organization means as well as what it requires.

Healthcare’s Consolidation Landscape

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Market and regulatory factors have unleashed a wave of merger, acquisition, and partnership activity that is changing the delivery of healthcare services.

Consolidation in the healthcare-provider sector has accelerated in recent years, reshaping the relationships between health systems, hospitals, and independent physicians across the country.

In the Buckeye State, healthcare consolidation activity has been a transformational force at OhioHealth, says Michael Louge, CPA, who serves as executive vice president and chief operating officer at the 11-hospital health system based in Columbus.

“When you look at OhioHealth, and you go back two or three decades, it was a much different organization. The reason it is different today is because of philosophy and the way we approach regional partnerships—how we have worked with physicians and hospitals in the region. Our whole organization’s evolution has been through successful partnerships and consolidations with regional players.”

Over the past year, statistics have been gathered on the pace of healthcare-provider consolidation.

In a recent HealthLeaders Media survey, 159 healthcare executives—mainly from health systems, hospitals, and physician practices—were asked about their merger, acquisition, and partnership (MAP) deals.

Eighty-seven percent of the respondents said their organizations were expected to both explore potential deals and complete deals that were underway in the next 12–18 months. Only 13% of the respondents said their organizations were not planning MAP deals in that same time period.

From the passage of the Patient Protection and Affordable Care Act (PPACA) in 2010 through the end of last year, merger and acquisition transactions involving acute-care hospitals increased 55% from 66 announced deals to 102, according to Skokie, Illinois–based Kaufman Hall. Last year, the operating revenue of acquired organizations was more than $22 billion, according to the consultancy.

Kit Kamholz, managing director at Kaufman Hall, says two sets of drivers are propelling consolidation activity among health systems and hospitals.

“There are transactions that are driven by financial rationale. This is driven by a level of distress at the smaller organization, either from a historical-financial standpoint, an access-to-capital standpoint, or they are experiencing some significant clinical deficiencies. … The second bucket is in the category of strategic rationale. These are organizations that tend to be relatively strong financially, that are considered to be strong community-based providers in their marketplaces; but they are looking at the landscape of the evolving healthcare environment and saying, ‘Do we have the skills and capabilities to be successful in this new era of value-based care?’ ”

Healthcare consolidation activity is impacting the country’s physician practices and physician-employment trends.