Insurance giant Aetna announced it will buy Bethesda-based Coventry Health Care, which provides Medicare and Medicaid services, for $5.7 billion. Two days later, Ohio-based Health Care REIT announced an $845 million deal to acquire McLean's Sunrise Senior Living. Because insurers are facing new pressures to contain overhead—an ACA provision known as the medical loss ratio requires them to limit spending on administrative costs and salaries to 20 percent, so they can spend at least 80 percent of premium dollars on medical care—they will be looking for ways to reduce overhead expenses. Acquiring smaller insurers to boost enrollment could be the way to do it.
Michael Dowling, who runs one of New York's largest hospital networks, is preparing to turn his business model on its head: He wants to keep his hospital beds empty, rather than full. That's because the North Shore-LIJ Health System, with 16 hospitals and more than 300 outpatient centers in Long Island and New York City, is laying the groundwork to be an insurer, as well as a provider of health care. Like other hospital chains across the country, it’s under intense pressure from public and private insurers, as well as employers, to accept flat-rate payments for care, rather than reimbursements for every service. And that puts pressure on hospitals not just to manage costs, but to keep people well—in short, to act more like insurers.
More than a quarter of the 50 million beneficiaries receive coverage through private Medicare Advantage plans, mostly health maintenance organizations, and Medicare's drug benefits are delivered exclusively by private insurers, subsidized by the government. Obama administration officials, lawmakers from both parties and beneficiaries have generally been satisfied with the private plans. "Medicare Advantage premiums down 7 percent on average, enrollment up 10 percent," the administration announced in February, and it said the quality of care under Medicare Advantage was improving. Federal spending on Medicare drug benefits has been about 30 percent lower than the Congressional Budget Office predicted when the drug legislation was passed in 2003.
Angioplasty has gotten safer in Michigan through a model state project to reduce complications. The project is a 15-year effort through which the state's heart hospitals share data and insights about the best ways to reduce the most common problems of coronary angioplasty and stenting. The death rate from elective procedures is very low—one death for every 1,000 procedures. Started among five hospitals in July 1997, the project has grown to involve all 33 Michigan hospitals that perform angioplasty in the state. It is thought to be the largest and most comprehensive state registry of the procedure of its kind, one of more than a dozen regional quality improvement initiatives funded by Blue Cross Blue Shield of Michigan.
When California health officials recently announced a 10 percent annual drop in hospital central line infections, they did not mention that they had found flaws in the facilities' reporting of one of the most serious infections that patients can suffer while hospitalized. In fact, the state's own fact-checking of records from one-fourth of hospitals statewide had uncovered a series of errors, including an overall 38 percent undercount of central line infections. In response, state officials asked hospitals to correct the data. How can states accurately count infections that occur in thousands of U.S. hospitals amid a tangle of differing definitions, counting techniques and plain human error?
Rajesh Bhargava, a physician at the Aurora Medical Center in Summit, has spent part of the past 2½ years developing a checklist to help prevent patients from ending up back in the hospital. In the Milwaukee area, Aurora Sinai Medical Center and Wheaton Franciscan-St. Joseph Campus, two hospitals that provide care for a disproportionate percent of low-income patients, have low readmission rates. Bhargava and others at Aurora were given the job to develop standardized processes that could be implemented at all of the health system's hospitals. One challenge is developing checklists and designing processes to ensure that a long list of seemingly minor tasks get done. The health system started with a program—Better Outcomes for Older Adults through Safe Transitions, developed by the Society of Hospital Medicine—and then modified it.