Robert L. (Bob) Smith, a retired Tenet Healthcare Corp. executive, has been named interim CEO of the beleaguered Parkland Health & Hospital System. His four-month agreement is effective Sept. 1.
"A little shell shocked but excited" is how Robert L. (Bob) Smith describes his mood one day after being named the second interim CEO for Parkland Health and Hospital System in Dallas.
The former Tenet Healthcare executive is leaving the comforts of retirement to help Parkland get on track. The safety net hospital must satisfy a large number of federally mandated requirements put in place after a series of surveys identified an extensive list of deficiencies deemed so serious as to create immediate and serious threats to patient health and safety. Parkland has until April 2013 to become compliant or face termination of its Medicare and Medicaid funding.
Smith succeeds Thomas Royer, MD, who retired in June 2011 as president and CEO of Dallas-based CHRISTUS Health and was named Parkland's interim CEO in Dec. 2011.
In an interview with HealthLeaders Media, Smith talked about his philosophy of problem solving, his preparation for the Parkland job, and why he decided to take on the challenge.
Q. How do you prepare for a job like this? A. My preparation is 35 years of experience working at a number of hospitals in a number of states. I've been involved at multiple levels up and down the line, including CEO and COO. It's having seen things before and knowing what works and what doesn't.
Problems are solved by smart people who listen to one another, jointly make decisions, and then move forward. What you do to prepare is talk to people, listen to people, and work together as a team to deal with the tasks at hand. You pull from your experiences as well as the experiences of others.
Q. In your opinion, what is the root cause of Parkland's problems? A. I have to say that I really haven't been there. I am at the facility today and I attended a few board meetings yesterday but I can't give a qualified answer right now. I didn't go through an interview process that included spending time in the hospital.
Q. How did you come to be named as Parkland's new interim CEO? A. I was with Tenet Healthcare for quite a while and retired last year. I told a number industry contacts that I would be interested in working on assignments on an interim basis. One of those contacts was involved in some of the turnaround process here at Parkland and encouraged the board chair [Debbie Branson] to contact me. I spoke with the chair and some of the individual board members.
My agreement starts on Sept. 1 but I won't be on site yet. I will be doing a series of orientation calls to make sure that once I am physically here I will be up to speed.
Q. What authority will you have to resolve the problems at Parkland? A. I think the board views me as the CEO on an interim basis. With the exception of hiring and terminating individuals in the executive ranks I will have full authority to continue the work that's underway and to make the changes that are necessary. I just won't be making high level executive changes without board involvement. No CEO would.
Q. You're credited with turning around Tenet's central states region. What problems did you face? A. Facilities were going through leadership changes as a result of problems within Tenet. There was a lot of turnover among hospital and corporate executives. When I came on in 2003 I dealt with talent management and talent placement as a means to affect a change in the overall operation of the region. I put new leadership in place and refashioned the executive talent at the facilities. It took several years to get that in place.
Q. You've commented that you have seen similar problems at other hospitals—not to the same extent—but that the problems at Parkland are solvable. Can you provide examples of similar problems and the steps you took to resolve them? A. I'd have to go through a lengthy list. It's all about people though. If it's a financial problem you help people understand how what they do has an impact on the overall financial well-being of the facility. When you have quality and safety issues, and they are usually the same thing, you focus on becoming a highly reliable organization.
I'll work to help each individual who works here to understand how they impact the culture of safety, the overall reduction of risk, and the improvement of quality. You solve problems through communication, visibility, and leadership by example. That means making sure the frontline supervisors understand how they impact and sustain the improvement process by leading by example.
Q. The June progress report from Alvarez & Marsal noted ongoing concerns about patient safety and adverse events that continue to happen at the hospital. How can large-scale, systemic issues be resolved? A. Rather than take isolated incidents and look at them one at a time, it's important to look at trending commonalities. It's really understanding how we can get immediacy of reporting data and metrics to improve that process. Tom was working on this. We need to continue that effort, The organization needs to have a robust reporting process in place so we can address the issues.
Q. Have you had any discussions with Dr. Royer? A. I know Tom. We both worked at Christus. I spent time with him yesterday and I'll spend time with him today.
Q. Your current contract is for four months. Are you committed to staying until a permanent CEO is named? A. I am, but that's at the will of the board. I am not a candidate for the permanent CEO position. At this stage in my career it's not something I am interested in. If I were at a younger stage in my career it would be an attractive position.
Q. Why did you take on this job? A. I didn't just get a telephone call and say, 'okay I'm in.' Parkland has had a great reputation over the years for saving lives and performing miracles. There are a large number of very dedicated people at Parkland who are doing the right thing but are faced with a challenge right now. Who wouldn't want to be part of this?
Robert L. (Bob) Smith, a retired Tenet Healthcare Corp. executive, is the new interim CEO of the beleaguered Parkland Health & Hospital System. The Dallas health system's board of managers made the appointment during a regularly scheduled executive session Wednesday morning.
Smith will replace Thomas Royer, MD, who has served as interim CEO since Dec. 2011 and will remain in that position until his contract expires at the end of this month. Smith is not expected to take the helm until mid-September.
Smith comes to Parkland at a critical time. The safety net hospital is racing the clock to resolve serious deficiencies that threaten patient safety as well as the facility's financial survival. The hospital has until April 2013 to work its way through a 400-item federally mandated corrective action plan (CAP) to address Parkland's shortcomings.
"Bob has extensive experience doing just what we need him to do: taking an organization facing significant challenges and turning it around," said Debbie Branson, chair of Parkland's board of managers. "With his engagement, we finish a task we started a few weeks ago when we named other new members of our senior leadership team, all selected because of their experience transforming challenged organizations."
Smith retired in December 2011 as the senior vice president of operations for Tenet Healthcare's central states region. He is credited with masterminding the struggling region's successful turnaround. In 2000, Smith was recruited by Clarent Hospital Corp. in Houston to complete a complex restructuring of the company and its hospitals. In between, he managed a three-state hospital region for Universal Health Services.
At Parkland, Smith's most urgent task will be to lead the effort to complete the tasks outlined in the CAP.
In recent months there has been growing concern that Parkland's systemic issues are thwarting improvement efforts. The June progress report from Alvarez & Martin, the independent safety consultant hired to oversee the CAP process, was critical of the number of patient care, patient safety, and adverse events that continued to occur at Parkland despite the implementation of a CAP, the daily presence of A&M, and "numerous state visits regarding adverse patient events."
In the report, A&M consultants placed blame on the inability of some members of the hospital's senior management team to drive "a true operations turnaround situation."
While it's unknown if Dr. Royer's departure is directly related to the A&M report, he has come under fire for taking action without board approval. The board's very public rebuke of his pick for chief implementation officer left many questioning if Royer had board support for the task at hand.
A national search is under way for a permanent CEO, but Smith is not expected to be a candidate for the position. According to the press release announcing his appointment, Smith will "serve as interim CEO until a permanent leader is named."
During their second-quarter earnings calls in July and August, senior executives at major health plans were upbeat about opportunities in the healthcare benefits business: Medicaid and Medicare enrollments are expected to grow, while commercial accountable care organizations hold the promise of reducing the costs of care.
That optimism, however, is tempered by economic reality.
During the calls the executives conceded, that the job market remains weak, which impacts health plan membership growth. In addition there is increased competition for a share of a shrinking commercial market. Meanwhile, a promising Medicaid market is constrained by state budget woes and Medicare funding remains uncertain.
Their challenge is to work within this system. During the earnings calls company officials outlined the steps they are taking to maintain revenue streams and deliver value to their providers and members.
The insurer is hanging its hat on its Accountable Care Solutions (ACS) business, which is developing a nationwide network of accountable care organizations. Thanks to increased demand, the company is accelerating its spending on the business.
During the second quarter Aetna announced an expanded relationship with Banner Health Network in Phoenix and new ACO partnerships with Hunterdon Healthcare Partners in New Jersey and Aurora Health Care in Wisconsin. It also has a joint venture underway with ACO partner Inova Health System to create Innovation Health Plans, which will offer products in Northern Virginia.
Aetna officials say the ACO arrangements provide the insurer with a 10% to 15% premium advantage over the average price point of competing products.
But don't look for Aetna to jump into the acquisition fray to grow its Medicaid membership. For now Aetna will stick to organic growth. CEO Mark Bertolini told analysts the insurer isn't interested in "bulking up Medicaid at the current prices of those assets."
Cigna is focusing on physician engagement to improve health outcomes and reduce costs by introducing its own version of the commercial ACO and expanding its successful HealthSpring model.
The proprietary Collaborative Accountable Care (CAC) program is an insurer/physician partnership that includes clinical support and data to enable physicians to add value to the care they provide. Cigna has 32 CACs in place, including 10 added in July alone. Its goal is to have 100 CACs serving one million members in place across the United States by 2014.
HealthSpring, the Medicare Advantage plan acquired by Cigna in 2011, is being rolled out to selected commercial clients. Cigna officials said the plan's physician partnership model, with its tightly aligned incentives and clinical management programs, is attracting the interest of employers seeking to control healthcare costs for their 65 and older employees and retirees.
The insurer is making strategic acquisitions to expand its product line. It is in the process of acquiring Great American Supplemental Benefits Group, a large manufacturer, distributor, and marketer of supplemental health insurance products.
Cigna says it will continue to develop its international business in India and Turkey through direct to consumer distribution channels. Its international focus is areas with significant middle class growth potential.
Humana Q2 Profit: -23%
Analyst expectations: Lower
Forecast: Mixed
Humana completed the acquisition of SeniorBridge in July 2012. This is a chronic care provider that offers in-home care to seniors with chronic diseases. Humana officials expect SeniorBridge to help reduce hospital readmissions by 50%.
The insurer is making significant investments in clinical nurses to increase participation in its acute and chronic care programs for seniors. Humana Cares, a telephone-based chronic care management program, is used by more than 50% of its senior members with chronic conditions and has reduced hospital admissions by 33%
But Humana is struggling with higher-than-expected medical cost trends, which it attributes to the preventive care provisions of the Patient Protection and Affordable Care Act. During the first six months of 2012 wellness visits per 1,000 members increased by 200% while the rate of routine physicals increased by 22%.
Company officials acknowledge that they did not expect the immediate and extensive utilization increases associated with the PPACA provisions. The insurer is adjusting its 2013 cost structure to accommodate the increases.
UnitedHealth Q2 Profit: +5.5%
Analyst expectations: Higher
Forecast: Positive
Organic growth and the acquisition of two Florida health plans helped increase Medicare Advantage participation by 340,000 seniors through the first half of 2012, the company says. UnitedHealth acquired Medica HealthCare Plans and Preferred Care Partners; several primary care centers and two medical centers were also included in the deal.
Medicaid represents a growth market, with 275,000 beneficiaries added during the first six months of 2012. New and expanded contracts in Ohio, Kansas, Louisiana, Texas, and Washington contributed to the increase.
UnitedHealth officials made it clear that while they want to continue to expand their Medicaid business, they need to know that states are committed to running viable programs. Stephen Hemsley, the CEO of UnitedHealth Group, said the giant insurer will withdraw its products or reposition its programs if state commitments weaken.
WellPoint continues to take steps to diversify its revenue stream.
The Amerigroup acquisition, announced in July, will add 19 states and 4.5 million members to its Medicaid footprint. It will also enhance WellPoint's ability to serve the dual eligibles market and capitalize on the emerging long-term services market.
The acquisition of 1-800 CONTACTS provides WellPoint with direct-to-consumer expertise as well as the opportunity to expand into a growing business segment. The contact lenses provider has more than three million active customers.
Health insurer Humana has contracted with 21st Century Oncology, a large Florida-based physicians group in what is believed to be a first-of-its-kind effort to bundle payments for radiation therapy services used to treat several common cancers. The physicians group will provide a defined set of treatments and procedures for a fixed price.
If successful, the effort could serve as a blueprint to help shift the costs of complex and expensive radiation therapy services from volume-based, fee-for-service charges to evidence-based treatment.
The bundling model already has a foothold in orthopedic procedures and is gaining acceptance in cardiology. Physicians and payers like the model because it can help stabilize revenue streams and payment structures.
Humana's three-year contract with 21st Century, effective Aug. 1, includes much of the national insurer's commercial and Medicare books of business, with the exception of its Medicare HMO business. Fort Myers-based 21st Century includes more than 250 facilities in 16 states and seven countries.
It employs or is affiliated with more than 500 physicians, including radiation oncologists and other cancer-related specialists such as urologists, medical oncologists, hematologists, gynecologic oncologists, and surgeons.
More than 130 employed radiation oncologists in 16 states are part of the Humana contract. While the precise number of patients covered under the contract is unknown, 21st Century's book of business with Humana involves more than one million patients.
The contract covers 13 of the most frequent diagnoses in 21st Century's practice, including cancers of the breast, lung, and prostate, as well as gastrointestinal and gynecological cancers, says Constantine A. Mantz, MD. He is the chief medical officer for the provider.
The bundles are based on ICD-9 codes and payment includes a very defined set of services, including patient consultation, the acquisition of CT scans and other imaging needed to plan the patient's radiation therapy, radiation dosimetry, treatment delivery, and follow up for 90 days.
21st Century has invested two years in the development of its bundling strategy. It worked with the Centers for Medicare & Medicaid Services to craft and refine a small number of treatment bundles for radiation therapy.
Among the challenges has been meeting payer expectations for reporting and transparency. The CMS experience helped the company sharpen its focus on delivering the specific measures and outcomes that payers want to see.
"The payer is looking for economic relevance," Mantz notes.
Based on its successful efforts with CMS, the company reached out to a number of commercial payers to replicate the bundling model. The Humana contract is the first result of that effort. Plans call for expanding the model to additional insurers.
As part of the Humana contract, 21st Century will track outcomes related to following the clinical care paths developed as part of the bundles. Mantz explains that each bundle includes radiation therapy services that have been identified as best practices through medical literature and consensus guidelines published by groups such as ASTRO, the American Society of Radiation Oncology.
In following the care paths, the physicians want to determine that the clinical outcomes are improving. One of the outcomes 21st Century wants to measure is the frequency of treatment interruptions related to the toxicity of radiation therapy.
Mantz explains, for example, that if a breast cancer patient has a significant skin reaction or other complication due to radiation therapy and has to stop treatment, the interruption could result in an unwanted outcome in terms of disease control.
Mantz says his group also hopes to simplify billing and payment on the provider and payer side by replacing the multiple filing and billing often associated with claims with a simple trigger that signals payment is due.
He adds that radiation therapy has a high number of codes associated with a course of care, which complicates the claims process. Radiation therapy for breast cancer can involve 20 to 25 different types of services, each with its own unique current procedure terminology (CPT) code. Bundling eliminates the need to obtain separate approval for each one.
The 13 bundles under the Humana contract cover about 80% of all of the diagnoses that are treated with radiation therapy. In the future, 21st Century wants to develop bundles that will be inclusive of every diagnosis and reduce the total number of bundles. The Humana contract includes some trial efforts to determine how the bundles can be more inclusive and simpler.
Humana did not respond to requests for information about its bundling program.
Cigna is doubling down on its commercial ACO strategy.
The insurer has accelerated the development of its collaborative accountable care (CAC) program. The CAC is Cigna's variation on the accountable care organizations (ACO) created as part of federal healthcare reform.
While ACOs focus on physicians and hospitals providing coordinated care to improve quality and lower the cost of care for Medicare beneficiaries, Cigna's version of the comercial ACO is an insurer-physician partnership that provides coordinated care to improve quality and contain healthcare costs across Cigna's commercial and Medicare Advantage books of business.
Leavitt Partners, a Salt Lake City–based health intelligence business estimates that there are currently nearly 200 commercial ACOs or ACO-like organizations at some stage of development. Aetna is one of them. Blue Shield of California is another.
Like Cigna’s efforts, Aetna’s ACO program is in its infancy but has plans for significant growth. It has 10 ACO agreements in place and expects to have 20 under contract by the end of 2012. It plans to develop a national ACO network over the next five years.
Cigna has fashioned the original ACO concept into a model that enables the insurer to use its extensive member database in a more formal care management relationship with selected physician partners.
The Connecticut-based insurer added 20 CACs this year, including 10 in July alone. Cigna now has 32 CACs covering 300,000 members in place in 16 states. Its goal is to have 100 CACs serving one million members in place across the United States by 2014, says Dick Salmon, MD, Cigna's national medical director for performance measures and improvement.
CAC contracts include Palo Alto Medical Foundation (California), New West Physicians Group (Denver), Mount Carmel Health Partners (Columbus, Ohio), and Dartmouth-Hitchcock Clinic (New Hampshire), and Medical Clinic of North Texas (Dallas-Fort Worth).
The aggressive expansion schedule reflects competition?Aetna is also committed to a nationwide ACO network as well as the promising results delivered by Cigna's CACs so far.
The physician-focused CAC model involves large primary care or multispecialty physician groups, and independent physician associations, as well as some integrated delivery systems (IDS) and physician-hospital organizations (PHO). Even when an IDS or PHO is involved in a CAC, the physician is still the focus because "physicians hold the power of the order pen," Salmon says.
Participating physician groups each have at least 10,000 Cigna members in their practice. Salmon explains that measuring total medical costs and quality parameters is difficult and can be unreliable for smaller populations.
Cigna looks for physician groups that have already worked for several years on improving traditional quality metrics such as Healthcare Effectiveness Data and Information Set (HEDIS) and are prepared to take on the bigger issue of improving broad, population-based metrics through care coordination. "Cigna becomes the payer partner that helps make that effort financially sensible and rewarding," says Salmon.
He adds that "a large multispecialty group that only cares about fee-for-service generation isn't going to be a good partner for us in this."
CAC contracts are typically for three years and are customized to reflect the improvement goals of individual physician groups. Goals are usually based on the extensive practice profiles and data maintained by Cigna.
For example, data might indicate that a group has a high rate of emergency department visits. The action plan developed to reduce the rate of visits would reflect the preferences of the physician group, which could include making more urgent care appointments available throughout the day, as well as adding evening and weekend office hours.
In the first year, Cigna pays a care management fee based on the planned improvements. After that, rewards are based on meeting the improvement goals.
The CAC program includes a clinical collaboration component between Cigna and the physicians, so participating physicians are required to hire one embedded care coordinator for every 10,000 Cigna members in the practice.
Salmon explains that it is the job of the care coordinator to use Cigna's health informatics on hospitalizations and gaps in care to improve patient care coordination. Predictive modeling is used by the care coordinator to identify patients in the practice who might be at risk for health problems.
Care coordinators also can assess a patient's foundational knowledge of their condition. An outreach call to resolve gaps in care for a diabetic, for example, could result in the patient being referred to Cigna's diabetic coaching program to become a more active participant in their care.
In early results, Cigna says that individual CACs have outperformed their market in several areas, including avoidable emergency room visits, improved control of A1c blood sugar levels in diabetes, and reductions in the cost of ambulatory surgery. For the eight CACs that have been in place for more than one year, 50% are meeting both quality and cost goals.
The Presidential election is not the only choice facing Americans this fall. Those who are offered health insurance through their employers' group plans will have coverage decisions to make during the annual open enrollment period.
But the results of a recent survey indicate some alarming gaps in knowledge among employers in the wake of the Patient Protection and Affordable Care Act.
First, according to the Deloitte Center for Health Solutions, which has released the findings of its annual survey, employers are unaware of solutions that could improve the safety and quality of care while simultaneously reducing the cost of care.
And most employers say their company is “not well prepared” to implement the 2014 provisions of the Patient Protection and Affordable Care Act. They have heard about the individual mandate; 72% reported they were familiar with it, but understanding payment and delivery system changes? Not so much.
But here is what is really scary: The survey respondents are exactly the folks who need to be up to speed on PPACA and its implications. The 2012 Deloitte Survey of U.S. Employers is based on the online responses to 32 questions from 560 randomly selected individuals, including business owners, C-suite executives (CEOs, CFOs, and human resources officers), as well as the people who are responsible for health benefit program decisions. The businesses they represent range in size from 50 employees to more than 2,500 employees.
Among the survey items covered were strategies for employee health benefits coverage and cost containment, opinions about healthcare system performance and cost drivers, and awareness of key features of the PPACA.
The survey results confirm a Deloitte suspicion that there is a lack of alignment within companies concerning their healthcare strategy. Bill Copeland, a principal at Deloitte Consulting and one of the survey authors, notes that CEOs and CFOs often had different answers to questions than the human resources officers. For example, 77% of responding CEOs listed government regulation as a major influence on overall healthcare costs versus 49% of benefits executives.
According to the survey results, employers aren’t sure if insurers are part of the solution or part of the problem. Copeland notes that health plans rated next–to-last, ahead of retail clinics, among the top seven healthcare investments they value.
Only 39% of employers placed a high value on their investment in health insurance plans although they rank insurance company costs among the top three influencers of healthcare costs. In terms of investment value, employers tend to be more traditional in their outlook with investments in primary care and prescription drugs rated as having high value.
Copeland says the findings may reflect a general outlook among employers that health plans are not clearly communicating how they can help employers lower their cost trends. While acknowledging that the appreciation of primary care is "a huge positive on the employer side," he wonders if employers really know what they might do differently around primary care or prescription drugs to help lower their costs.
For example, there seems to be some confusion among employers as to what steps to take to develop their benefits strategies. Wellness, for example, received a middle-of-the-road rating around value but increasing wellness programs was ranked among the top three changes employers expect to make in their benefits strategy.
Copeland suggests that employers are unaware of all their options and are reacting more to all of the industry talk surrounding wellness rather a demonstrated return on investment.
This all means health insurance plans probably need to do a better job of helping employers connect the dots between benefits, provider incentives, and outcomes and the role insurers play in bringing everything together into a single package.
That brings us back to the PPACA. Employers are much more familiar with possible penalties they might incur than they are with provisions that are designed to help reduce their healthcare costs, such as the creation accountable care organizations and the introduction of bundled payments. Insurers are touting these measures to the media and providers, but somehow employers are not getting the message.
Deloitte's survey results certainly raise questions about the role health insurers should play in educating their employer customers. There seems to be an opening here. Employers are concerned about their benefit strategies and they are not sure what steps to take to resolve cost issues. Insurers are talking to employers but there is a disconnect in the conversation that needs to be resolved.
Parkland Health and Hospital System continues to make progress on the hundreds of tasks that it must complete by April 2013 to meet the terms of its systems improvement agreement (SIA), according to the June 2012 monthly progress report from Alvarez & Marsal, the independent safety consultant hired to oversee the process.
The report, however, notes ongoing concerns regarding the number of patient care, patient safety, and adverse events that have continued to occur at Parkland despite the implementation of a corrective action plan, the daily presence of A&M, and "numerous state visits regarding adverse patient events."
Among the "adverse quality and safety events:" wrong site surgery, medication errors, and EMTALA (Emergency Medical treatment and Active Labor Act) compliance issues.
In the report, A&M consultants lay the blame for these problems on the inability of some members of the hospital’s senior management team to drive "a true operations turnaround situation." In mid-July Parkland announced a new interim senior leadership team, which Debbie Branson, chair of the hospital's board of managers, characterized in a HealthLeaders Media interview as a team with "much-needed turnaround experience in the healthcare industry."
The June report is the third in a series of required monthly updates submitted to the Dallas office of the Centers for Medicare & Medicaid Services by Alvarez & Marsal Health Industry Group, a Washington D.C.-based management consulting firm that specializes in performance improvement.
The 36-page report was released Tuesday by CMS as part of a freedom of information request by HealthLeaders Media. The report itemizes about 400 tasks and action items, as well as completion dates, from the safety net hospital’s corrective action plan (CAP). Parkland has completed approximately 280, or 70% of the tasks.
Among the key goals met in June:
Analysis of patient volumes in the emergency department, impatient clinics, and outpatient clinics to improve patient access and throughput.
Study on case management, discharge planning, and related social work.
Beginning electronic medical record enhancements to help with medication management, administration and reconciliation.
Revision of crash cart management to improve the cart stocking process.
Rollout of an informational campaign on patient safety, infection prevention, and patient rights.
In addition, the hospital has hired Mercer Consulting to revamp its human resources department, including a redesign of policies and procedures on performance management and progressive discipline. Additional outside consultants may be hired to help in case management, women's and infant's specialty health (WISH), and board governance.
According the report, problems persist in Parkland's efforts to "stabilize and transform psychiatric care." Deficiencies in this area set in motion a series of CMS surveys and immediate jeopardy rulings that led to Parkland and CMS signing in September 2011 a very rare SIA. Only one other hospital, Cape Fear Medical Center in Fayetteville, NC, currently operates under an SIA.
Parkland has made "only minimal progress" in recruiting permanent leadership, as well as consistent attending physician coverage for its psychiatric services, the report states.
In June, the hospital terminated its interim director of psychiatric services because of a delay in obtaining a current Texas RN license. Parkland has contracted with the University of Texas Southwestern Medical center to obtain locum tenens psychiatrists, but actual staffing has been delayed.
Parkland is also behind schedule in resolving systemic nursing deficiencies. Acuity-based staffing has not been implemented.. Despite recent training in the creation and documentation of care plans, "chart audit results suggest continuing deficiencies," the report says.
Keeping on the CAP schedule is particularly important as Parkland mounts a nationwide search for a permanent CEO. Thomas Royer, MD, was named interim CEO in November 2011. His contract was extended at least once, and his current contract is set to expire in September. Branson has said that she is "hopeful that we will have made significant progress toward the completion of the CAP and that will be a plus for anyone looking at the job."
In an e-mail exchange, David Wright, the deputy regional administrator for CMS Dallas, acknowledged that CMS "had hoped Parkland would be farther along, but we understand the reasons why some of the fixes have been delayed, and we have confidence the hospital will be able to make sustainable corrections within the time period spelled out by the Systems Improvement Agreement."
A federal class action suit charges that Blue Cross and Blue Shield of Alabama and the Blue Cross Blue Shield Association have conspired to restrict competition to drive up health insurance premium costs.
The antitrust suit filed on behalf of chiropractor Jerry L. Conway, DC, and the customers of the Birmingham-based insurer, alleges that the trade group's licensing agreements with its 45 members give each Blues plan as "exclusive, competition-free slice of the healthcare market." As a result "healthcare providers are subject to much lower rates and less favourable terms."
The suit notes that BCBS Alabama controls access to 93% of healthcare insurance subscribers in the state, which makes it difficult for a provider not to agree to its reimbursement terms. "Most healthcare providers simply cannot survive economically as out-of-network providers."
Among the efforts to eliminate competition, according to the suit, is the trade group's restriction that a Blues' provider network can't be sold or transferred to non-Blue insurers. Because provider networks are intrinsic to the health insurance business, the restriction creates "an immense barrier" to market entry where a Blues plan dominates.
Not too surprisingly, both the trade group and the Alabama Blues are dismissing the merits of the suit. "Our company operates in compliance with a license from the Blue Cross Blue Shield Association," said Koko Mackin, vice president of corporate communications for the Alabama Blues. "We comply with all state and federal laws. The allegations have no merit."
Kelly Miller, a spokesperson for the trade group says the suit has "no merit and we will vigorously defend the Blue Cross Blue Shield model."
The suit seeks damages equal to three times the unspecified amount of damages suffered by the plaintiffs. It also asks the court to stop the defendants from entering into or enforcing any agreements that restrict the territories or geographic regions where a Blue Cross Blue Shield Association member "may plan to compete."
The suit was filed in U.S District Court, Northern District of Alabama by Whatley Kallas, LLC, which has offices in several cities across the country, including New York and Birmingham. Its website describes the firm as a "healthcare boutique" whose lawyers have focused their practices on "litigating against, and negotiating with, health insurers across the country on a wide range of issues."
Most recently Whatley Kallas attorneys were the principal litigators and negotiators for a settlement in Feller v. Blue Cross of California, which successfully sought to prevent class action members from being trapped in closed plans and subjected to what is known as a "death spiral," where the premiums for the plans increase dramatically because no new enrollees are being added, and younger and healthier members move to other plans.
Joe L. Whatley, a senior partner in the firm, said in an interview with HealthLeaders Media that the firm is awaiting a ruling on a motion filed last week to consolidate the Conway suit with four other similar Alabama cases that involve business subscribers. The move would help eliminate duplication of effort among the different legal teams.
The firm has filed notice of the Conway suit with 45 Blue Cross Blue Shield plans across the country. Whatley said if additional providers in other states want to join Conway's suit it would simply be a matter of amending the suit.
The BCBS plans have until late August to respond but are expected to request extensions.
Similar lawsuits have been filed by other plaintiffs and lawyers in North Carolina and Tennessee.
A bill passed Tuesday by the Massachusetts legislature to contain healthcare costs could leave insurers and large hospitals holding the bag for $225 million in surcharges over four years. Governor Deval Patrick (D) is expected to sign the bill into law.
The surcharge would be levied against health insurers($165 million) and larger hospitals ($60 million) to fund several provisions of the bill, including the creation of a $60 million prevention and wellness trust and $135 million in infrastructure improvements to community hospitals.
The trust monies would fund state grants for community-based prevention, public health, and wellness efforts to reduce the rates of costly preventable chronic diseases, such as obesity, diabetes, and asthma.
Health plans are predictably unenthusiastic about the surcharge. "We don't question the usefulness," explains Eric Linzer spokesperson for the Massachusetts Association of Health Plans, a trade organization. "But if it's for the general public good, then it's something we think the state should fund."
Payers may opt to cover their share of the surcharge in a single lump sum due in mid-2013 or over four annual payments.
S 2400 is being touted as the first effort by a state to rein in healthcare costs. It is considered a natural progression of the state's landmark 2006 healthcare reform bill, signed by then Gov. Mitt Romney (R), which includes an individual mandate. That legislation is recognized for expanding health insurance coverage, but has been criticized for doing little to control healthcare costs, which have reportedly increased an average of 6.4% per year.
Under S 2400, increases in healthcare spending would be linked to the state's gross state product (GSP) until 2017 and then slightly below the GSP through 2022. Supporters predict that it could reduce healthcare spending by $200 billion over 15 years.
A commission will be established to monitor healthcare costs and all healthcare entities—including health insurers—will be expected to comply with the performance targets or face fines of as much as $500,000. Although insurers aren't directly involved in the delivery of care, Linzer explains that because the commission will use a total system metric to assess performance, health plans must also meet the reduction targets.
Other provisions of the 349-page bill that address health insurers include:
A requirement to disclose out-of-pocket costs for proposed healthcare services in a readable and understandable format
Extension of provisions of the small business health insurance legislation passed in 2010 that require the state Department of Insurance to review healthcare premium filings.
Extends state DOI authority to help mitigate and stabilize large spikes in premium increases from year to year.
Increases to 14% from 12% the minimum premium savings for tiered or selective network healthy products.
Creates a smart-tiering plan where healthcare services are tiered and member cost sharing is based the tier placement of the services
Linzer told HealthLeaders Media that for payers, one upside of the legislation is the bill's recognition that the market strength of some providers is driving higher healthcare costs. The bill creates an 18-member special commission to review price variations among providers and to look at the feasibility of requiring insurers to separately contract with each location for a multi-location provider to reflect geographic differences in provider costs.
Martha Coakley, the state‘s attorney general, published in 2010 a report that linked the higher reimbursements received by some health facilities to their expanded markets and not necessarily to the care they delivered.
S 2400 faced limited legislative opposition. Gov. Deval Patrick (D) has until Aug. 10 to act on the bill, which he supports.
Medicare turns 47 this week. Here's to another 47…maybe.
What began as a program designed to help seniors and disabled persons with the cost of healthcare has exploded into what some would describe as a costly, complicated, ineffective magnet for fraud—an example of bureaucracy at its worse.
As the pace of healthcare reform quickens under the Patient Protect and Affordable Care Act, one thing is constant, the inability of Congress to fix Medicare.
How to fix the entitlement program overseen by the Centers for Medicare & Medicaid Services has been the subject of intense debate among stakeholders and policymakers who have been searching for the elusive secret of how to balance Medicare funding against the growing demand for healthcare services and the need for providers to be sufficiently reimbursed for those services.
Congressional hearings on Medicare come and go. In recent months most have focused on the sustainable growth rate formula. The SGR, which was part of the Balanced Budget Act of 1997, was designed to help control Medicare costs by setting annual spending targets. That worked for a couple of years until it became apparent that significant cuts in physician reimbursements would be required to help reduce spending.
For about 10 years now Congress has stood firm in refusing to enact any cuts to physician reimbursements, choosing instead to defer the cuts for one or two years at a time. That was okay in the pre debt-reduction era, but now everyone seems to want Congress to actually do something. Will that happen?
The House likes to hold hearings about healthcare. It's good theater, but sometimes not much more.
Last month a House committee gathered a group of physician representatives to talk about the SGR formula and potential solutions. It seemed promising, and might have been, if Rep. Michael Burgess (R-TX) hadn't announced at the outset that he would introduce legislation to once again delay implementation of the SGR formula.
He wants to delay the cuts to physician services for another year to give the Congress time to "fully vet and evaluate" SGR replacement proposals. Huh? Wasn't that the purpose of all the recent hearings and discussions? It doesn't look like anything serious will happen there for a long time.
Medicare discussions on the Senate side just seem a lot more purposeful in seeking a real solution. Everyone should be paying attention to a series of roundtable discussions hosted by Sen. Max Baucus (D-MT), who is the chair of the powerful Senate Finance Committee. What seems to be taking place there is an honest, roll-up-our-sleeves-and-get-to-work effort from Republicans as well as Democrats.
Look at what Baucus has done so far. He has invited former Medicare administrators (May), representatives from the private sector (June), and physicians (July) to the committee to offer their ideas on how to resolve the physician payment issue and insure Medicare's future.
The roundtable sessions covered a wide range of topics, including models of care, specialty reimbursements, and quality and efficiency. There was agreement that the SGR doesn't work and needs to be repealed; that whatever new payment plan is developed needs to support patient-centered and coordinated care with an emphasis on quality; and that the wheel doesn't need to be reinvented because there are plenty of examples of providers and payers successfully incorporating new payment structures that could be modeled by Medicare.
It doesn't look like a single solution will percolate to the top, but let's look at the big ideas presented by each group during their roundtable meetings.
Former administrators for the Centers for Medicare & Medicaid Services or its predecessor, the Health Care Financing Administration Gail R. Wilensky,PhD; Bruce C. Vladeck, PhD; Thomas Scully; and Mark McClellan, MD and PhD, provided a letter to the finance committee laying out their recommendations:
The SGR must be replaced by a more practical system with administrable limits on total Medicare physician outlays. In the short term, that could mean freezing most fees at current levels while addressing the need for payment adjustments for primary care and rural providers. Over the long term, a benchmark or a formula could be used to identify growth targets.
While there should be alternatives to fee-for-service payments for physicians, participation should be voluntary. Physicians who remain in the traditional FFS payment system should be subject to a reformed spending limit.
The calculation of FFS payments should reflect evaluation, care coordination, and other cognitive services.
An independent entity with broad-based representation should be created to advise CMS on RVU (relative value unit) and physician payment reforms.
CMS should experiment with and implement the bundling of appropriate FFS CPT (current procedural terminology) codes into bundled payments to appropriate physicians or physician groups.
To reduce costs and improve quality physicians participating in Medicare must receive timely and usable data from CMS, which needs the resources necessary to improve its data systems, as well as its contractor's systems.
Private sector (Aetna, Blue Cross Blue Shield of Massachusetts, Humana, CareFirst BlueCross BlueShield, and Hill Physicians Medical Group) recommendations:
A holistic view of payment that integrates physician and institutional payment is necessary to counter fragmentation of care.
Any proposals to modify Medicare payment policy should be sufficiently flexible to allow for practice variations.
Payments to primary care physicians should recognize the role they play in developing and monitoring care plans for their sickest patients and reinforce the central role of primary care in helping members manage their health risks.
Physicians' (American Medical Association, American Academy of Family Physicians, Louisiana State University Health Science Center, Henry Ford Health System, and New Mexico Oncology Hematology Consultants) recommendations:
New models of care coordination and payment such as medical homes and bundled payments hold promise
No single payment system should replace the SGR formula, instead a blended payment system that combines FFS, care management fees, and quality improvement payments might be better.
For the treatment of chronic illnesses physician payment and incentives should reflect that outcomes are long term.
The Medicare payment system should be nimble enough to reflect changes in scientific understanding and physician practice standards.
There are good ideas out there to help shore up Medicare finances, improve care, and meet provider needs, but Congress needs to be willing to take those ideas and mold them into meaningful legislation. No need to reinvent the wheel. Settling this issue once and for all would be a nice birthday gift for the program.
At the end of each roundtable Sen Baucus has requested additional information from the participants. He hasn't promised to present legislation this year, but it's clear that the committee wants to do something more than just punt for another year.
Will that happen? The news the last couple of days isn't at all promising as Congressional leaders signal their intentions to delay big decisions until after the November elections. While the life of Congress may center around elections, in the healthcare world nothing has stopped.
Patients are still seeking care and physicians are still providing it, even under the cloud of wondering if Congress will ever fix the SGR formula problem.