For the upcoming federal fiscal year, Medicare payment rules and methodologies for hospital inpatient care feature a payment-rate hike and $800 million increase in uncompensated-care reimbursement.
Medicare reimbursement to about 3,330 acute-care hospitals nationwide is expected rise $2.4 billion in the federal fiscal year beginning Oct. 1.
In the FY2018 Inpatient Prospective Payment System (IPPS) final rule released yesterday, federal officials estimate Medicare reimbursement to acute-care hospitals will rise about 1.3%. This figure represents the adjusted base payment rate and the hospital-to-hospital financial impact of incentive payment programs such as the Hospital Readmissions Reduction Program (HRRP).
A factsheet produced at the Centers for Medicare and Medicaid Services (CMS) details features of the IPPS final rule, which is slated for publication in the National Register on Aug. 14.
The adjusted base payment rate, which is pegged at 1.2% has five elements:
Market basket update +2.7
Productivity update -0.6
Removal of a one-time adjustment made in FY2017 to compensate hospitals for implementation of the Two-Midnight Rule for hospital-admission status -0.6
The American Hospital Association (AHA) posted an advisory report on the Chicago-based organization's website that offered a tepid take on the new IPPS final rule, including describing the Two-Midnight Rule payment adjustment as designed "to restore unlawfully instituted two-midnight policy cuts."
In the advisory report, AHA Executive Vice President Tom Nickels criticizes two provisions of the new final rule: a data-collection worksheet for uninsured patients and the refusal of CMS to offset a hospital-reimbursement cut in FY2017.
"We continue to have concerns over the accuracy and consistency of the 'Worksheet S-10' data that CMS will use to determine the cost of treating uninsured patients. … We are also disappointed that CMS has decided not to restore last year's excess cut to reimbursement rates for hospital services. While a reduction to the hospital update factor was mandated by law in 2012, CMS ignored Congress' intent by imposing a cut that was nearly two times what Congress specified."
There are several other elements of the new IPPS final rule that will impact acute-care hospitals:
CMS is easing provisions of the Medicare and Medicaid electronic health record (EHR) incentive programs. The alleviation provisions include a change to "EHR reporting periods for new and returning participants attesting to CMS or their state Medicaid agency from the full year to a minimum of any continuous 90-day period during the calendar year," the CMS factsheet says.
Readmission penalties assessed to hospitals under HRRP are being changed to reflect a hospital's performance relative to other hospitals with similar numbers of Medicare and Medicaid dual-eligible patients.
Medicare payments to hospitals for uncompensated care under the Disproportionate Share Hospital program are slated to increase about $800 million over the FY2017 funding level.
The politics of repealing the Patient Protection and Affordable Care Act have soured, leaving President Trump and repeal-minded Republicans in Congress with few paths forward on healthcare reform.
With last week's collapse of Obamacare repeal-and-or-replace efforts in Congress, the Republican Party's options have dwindled to repair or wreck, a trio of DC healthcare-policy watchers says.
"Republicans have not been able to pass several versions of replace. They have tried a big version. They have tried a skinny version. They have tried repeal-only. Instead of repeal-and-replace, it's time to move to repair," Earl Pomeroy, a former Democratic U.S. representative from North Dakota, told HealthLeaders today.
At this point, any repeal effort appears doomed, the ex-president of the National Association of Insurance Commissioners says.
"In healthcare, good policy is good politics. The lesson we learned on repeal-and-replace is the policy was not very good. It threw a lot of people out of coverage. The public didn't like it; therefore, the politics behind repeal-and-replace were lousy."
Patient Protection and Affordable Care Act (PPACA) is politically primed for repair—even for Republican Party lawmakers and voters who have opposed the PPACA for the past seven years, Pomeroy says.
"The politics are clearly on the side of repair. We have moved past repeal-and-replace. Now, the options are wreck it or repair it. The politics are very poor on the wreck-it scenario. With the governing power held exclusively by the Republican Party in the presidency, House, and Senate. They will be held responsible for actions that wreck the insurance exchanges."
Finding Healthcare Reform Common Ground
There does not appear to be a legislative path forward for Republican lawmakers to repeal the PPACA, Nicholas Manetto, principal at Faegre Baker Daniels Consulting in Washington and former press secretary for a GOP congressman, told HealthLeaders today.
"I tend to agree with the take of several senators in leadership that unless something shifts to move a no vote to yes, there is not much value in pursuing a subsequent vote."
The legislative logjam presents an opportunity for Democratic and Republican lawmakers to stand on common ground and cut a deal on healthcare reforms, according to Pomeroy and Merrill Matthews, PhD, resident scholar at the Institute for Policy Innovation in Irving, TX.
Members of Congress on both sides of the aisle held several shared policy positions on healthcare before passage of the PPACA in 2010, Matthews told HealthLeaders today.
"There has always been support for addressing the problem of the uninsured. There was widespread support among Republicans and Democrats on providing some kind of subsidy to lower-income people to make sure they could afford health insurance. There was pretty wide report for repairing the safety net—you had 35 high-risk pools in the states."
Pomeroy says the commercial insurance market and Medicaid are two crucial areas where the rival parties in Washington have common interests among their home-state constituents.
"On insurance, the debate so far has shown there is enduring support for insurance coverage of pre-existing conditions. Most people think that if you have a health condition you should still be able to buy coverage. So you have to look at how you can make insurance markets function when you can't control the risks you have coming on the books. …
"The Medicaid component of the Affordable Care Act extended the ability of people with very modest incomes to finally get coverage, and the public is determined that that coverage should continue. That was fought over literally for months. … In the end, the Republicans could not get the votes to phase it out. That means that states that have not extended Medicaid may want to take another look at it."
While the Republican Party's healthcare proposals languish on Capitol Hill, Matthews says the Trump administration has a golden opportunity to broker a historic healthcare deal with Democratic lawmakers, as long as Donald Trump sits on the sidelines. "If Trump assigns cutting a deal to Mike Pence, he may be able to get it done. Trump seems too volatile."
He says the president should borrow a page out of his predecessor's playbook from early 2010, when Barack Obama invited Republican and Democratic lawmakers to the White House for discussions on healthcare reform.
"I think it was all for show, but Obama was always presidential. Trump can be presidential at times; but, at other times he can't. You never know which Trump is going to come out."
Ironically, an Obamacare-wreck strategy that ends federal subsidies on the insurance exchanges could be a route to repairing the PPACA, Matthews says.
"If Trump does not continue to make those payments, more insurers will pull out of the exchanges, and faster. It may take the catalyst of more insurers pulling out before they finally come to a willingness to agree on something."
A Massachusetts-based skilled-nursing facility sets a high bar for quality, invests in staffing and HIT, and has created operational efficiencies based on the proximity of its facilities.
Research published this month indicates post-acute-care at skilled nursing facilities could be a significant source of wasteful healthcare spending.
The lead author of the peer-reviewed study, Massachusetts Institute of Technology Professor Joseph J. Doyle Jr., says a big next steps is to examine best practices at good SNFs.
By at least three measures, Winchester, MA-based Salter Healthcare is a good SNF organization:
High Medicare Ratings: All three Salter Healthcare SNFs (Aberjona, Winchester Rehabilitation and Nursing Center and Woburn Rehabilitation and Nursing Center Are the other two) have 5-Star Medicare ratings on Nursing Home Compare.
Sustainable Finances: "We are able to have a margin that allows us to invest in IT, to invest in training, and to invest in rehabilitating the facilities, rather than just trying to hang on for another year," says co-owner Richard Salter.
Low Staff Turnover: In a sector with high rates of nursing turnover, Salter says his organization is noteworthy for staff retention. "We keep people for five to 10 years. They get the proper training; they have the proper skill sets; and they are working with other employees who also have proper training and skills."
Salter identifies five essential elements to his organization's success:
1. Invest in Staffing
Salter says his organization invests significant time and money in clinical-care staff, and quality is engrained in the organization's culture.
"When every other SNF looks at our cost of nursing, they say, "'You are spending too much money. How can you be in the 99th percentile in spending per patient on all of your clinical costs?'"
But if those costs were to be reduced, "you are not going to have high-quality care, and you are not going to have your contracts, and you are not going to be as good."
2. Value Human Resources
Morale is key to retention , says Salter.
"It's not just about how many staff you have, although that is important. It's about how long they have been there, how good they are, and how they show up for work in the morning."
"On the high-tech, high-touch spectrum, the people in healthcare are high-touch people. They want to feel good about the care they are giving their patients; they want to feel proud of their professionalism and their licensing because they chose this career and they chose this path; and they want to work with people who feel the same way."
Mediocrity is not tolerated. "The biggest mistake we make in management is when don't terminate someone who is doing a mediocre job.
"The employees are good," says Salter, "and they want other good employees working next to them."
3. Stay Small
The Salter Healthcare strategy is based on what it is not doing, he explains. "We are not doubling in size. We are not thinking about where we can buy more facilities and ramp up to become bigger."
The organization operates three facilities in the same geographic market, making it "efficient at filling the backroom stuff."
"Our goal is low cost and high quality. That is what everybody says, but it is easy to say and hard to do. The way we stay low-cost is to not over grow, and to not redirect resources to the next new project. We do what we do well, and we just keep doing it."
4. Manage Your Payer Mix
To continue to serve all comers—including frail geriatric patients—without going bust financially, Salter Healthcare benefits from a diverse payer mix.
"Sometimes, they are tough cases and there is great insurance. Sometimes, there is full Medicare reimbursement. Sometimes, you have a Medicaid patient, and you don't get paid much at all," Salter says.
"You have to have the proper mix of Medicare patients, private-insurance patients, and Medicare and Medicaid dual-eligible patients, so you have collectively enough revenue to cover the high expenses of the good care."
5. Invest in Technology
Over the past five years, Salter Healthcare has invested heavily in IT capabilities. "At our three facilities, we spend about a million dollars a year on IT—on software, and hardware, and people in that department. It's a huge number for an operation our size," Salter says.
"All the filing cabinets are gone. The nursing aides are working in kiosks documenting their bathing and weighing—it's like a giant McDonald's keyboard station with icons and pictures, so they don't have to be programmers. The nurses have access to the patient database."
Its investment in IT has boosted Salter Healthcare's care-coordination capabilities with hospitals and physicians, he says.
"We can interact with the hospital systems; and the doctors, when they come into our facilities, they can pop information into our system and the hospital system simultaneously."
The organization is "trying to make sure there is continuity between us and the hospitals, and, eventually, to home care. That's what we have to do to stay in this game."
The primary elements of UnityPoint Health Meriter Hospital's bundled-payment model are care navigators, relationships with cost-effective skilled nursing facilities, and a robust home-health capability.
This story was originally published in September, 2015.
Over the past five years, federal officials have targeted hospital readmission rates, including payment penalties for conditions such as heart failure and pneumonia in the Hospital Readmissions Reduction Program (HRRP).
The HRRP penalties have spurred change, says Jeffrey Brenner, MD, executive director of the Camden Coalition of Healthcare Providers, a nonprofit organization working to improve population health and promote value-based care in one of New Jersey's most disadvantaged communities.
"This is the most exciting moment of my career. Partly because of readmissions penalties, people are having discussions they have never had before," he says.
From 2007 to 2011, the all-cause 30-day hospital readmission rate for Medicare fee-for-service beneficiaries held steady at about 19% to 19.5%, according to the Centers for Medicare & Medicaid Services.
The Medicare FFS beneficiaries readmissions rate fell to 18.5% in 2012 and 17.5% in 2013.
"When everything is said and done, the whole health system is going to look different," Brenner says of initiatives such as HRRP that are accelerating efforts among healthcare providers to build more seamless care continuums, improve care coordination, establish community partnerships, and engage patients to set and achieve their health goals.
For hospitals and physician practices, the key to readmissions-reduction success is working with community partners to effectively serve high-risk populations such as elderly patients with multiple chronic conditions, he says.
"You have to reach out to the community to have an impact."
Bundled Payments Drive Change at Community Hospital
In Madison, WI, UnityPoint Health Meriter Hospital has used bundled payments for hip and knee procedures as a springboard to quicken the organization's adoption of value-based care and to establish better relationships community partners.
Meriter, a member of Iowa-based UnityPoint Health that features a 448-bed community hospital, started performing knee replacement procedures under bundled payments in 2012 and contracted with CMS to performed hip procedures through the agency’s Bundled Payments for Care Improvements program in 2014.
For the fiscal year ending December 2014, UnityPoint Health posted net revenues at $557 million. Meriter was UnityPoint Health’s strongest subsidiary in 2014, posting net revenue at $405 million.
Readmissions reduction is one of the primary goals in Meriter's approach to bundled payments, says Philip Swain, PT, MBA, former director of orthopedics and rehabilitation at the hospital and currently director of orthopedics at UW Health in Madison, WI.
For lower-joint surgeries, readmission rates fell 68% after Meriter started bundle-payment contracting, he says. "It had a halo effect over all of our joint-replacement patients."
The primary elements of Meriter's bundled-payment model include deploying care navigators, building and maintaining relationships with cost-effective skilled nursing facilities (SNFs), and establishing a robust home-health capability.
Key Coordination Role: Care Navigators
To staff effective bundled-payment programs, care navigators are critically important, Swain says.
"They hold the hand of the patient all the way through the care continuum. They look proactively at risk factors. They start mitigating those risks before the patient even goes into surgery."
The care navigators are part of the patient discharge process and stay in touch with patients through phone calls after they leave the hospital. "They make sure the patient's medication is working. They eliminate as many pitfalls as possible."
Care navigators serve as an essential point of contact for patients before, during and 90 days after a hip or knee replacement procedure, says Pamela Dahlke, Meriter's director of care coordination. "We follow those patients through a more extended period of time."
Care navigators play a pivotal role in the post-acute care setting, she says. "High success comes with connecting patients with providers who they can get to."
Establishing SNF Partnerships
When care navigators began reaching out to community partners, Dahlke says local SNFs were "skeptical at first," chafing in particular over the drive in bundled-payment contracting to shorten length of stay at hospitals and post-acute-care facilities.
"In this journey, we are all in it together; but when you talk about length of stay, it's a difficult conversation to have."
Before participating in bundled-payment contracting, Meriter did not have strong relationships with SNFs and the hospital made establishing partnerships with cost-effective facilities a top strategic priority, Swain says. "It took a while to break in."
He says the relationship-building process featured three steps:
Outreach to SNFs that was designed to share Meriter's approach to bundled-payment contracting and to identify facilities with partnership potential
Crafting informal partnerships with cost-effective SNFs that were willing to align with core bundled-payment principles such as limiting length of stay
Establishing formal SNF partnerships that include contractual agreements such as care-coordination commitments
Robust Home-Health Capability
Home-health nurses are the frontline staff members for the hospital’s care transition program, which features home visits and an average of five check-in phone calls in the 30 days following hospital discharge.
"We can help get patients out of the hospital and prevent readmissions. Keeping the care at home—safely—will drastically reduce cost of care to the system," says Mandy McGowan, director at Meriter-UnityPoint Health Home Care.
Home-health nurses have been integrated into Meriter's electronic medical record system, which boosts care coordination and eases the hospital discharge transition, she says.
"The discharge goes much smoother. We have what we need. We work with discharge planners in the hospital. They speak with us several times per day."
The communication between hospital staff and home-health nurses is fundamental to post-acute-care success when treating high-risk patients, she says.
"We have built up the comfort level of discharge planners so they can talk with patients about post-acute care options. All discharge planners spend at least one day training with home health."
Meriter's care transitions program involves an intense level of patient engagement, McGowan says.
The home-health staff calls patients in their hospital rooms the day before discharge to outline the discharge process. Depending on the risk level for complications, home-health nurses visit or call patients at home on the day of discharge to review care plans, check medications, urge follow-up visits with the orthopedic surgery team, and make sure patients are prepared to recover at home.
"We talk with them about their diagnosis and what happened during their acute episode. We ask them what they were feeling the day when they needed to go to the hospital, so they don't panic if that takes place again. They have a plan in place."
After the day of discharge, patients in the care transitions program receive a phone call three days later, then weekly for 30 days.
Meriter's care transitions program is having a neutral financial impact on the organization, but the effort is clearly helping to avoid unnecessary medical spending, McGowan says.
"We can avoid observation readmissions to the hospital. There are things we can do in the home like draw labs that avoid a trip back to the hospital… We can help keep patients at home rather than in a skilled nursing facility, which is a tremendous financial benefit to patients."
The National Quality Forum sends risk-adjustment model designers back to the drawing board after their largely unsuccessful attempts to link social risk factors such as ethnicity with medical-treatment outcomes.
A two-year trial designed to examine the impact of risk-adjusting medical-treatment performance measures for social risk factors has raised far more questions than it has answered.
On July 18, the National Quality Forum (NQF) released a report on the trial, which began in April 2015. The trial is most noteworthy for what it did not prove and more research is necessary, the report says.
"One of the most striking findings of the trial was that measures with a conceptual basis for adjustment generally did not demonstrate an empirical relationship of the social risk factors to the outcome measured," authors of the report wrote.
The impact of social risk factors such as income and education level on medical-treatment outcomes at hospitals and other care settings has been debated hotly for several years.
Supporters of risk-adjusting medical-service payments for social factors contend that patients with social risks are more challenging to treat, placing an unrecognized financial burden on safety-net hospitals and other caregivers in disadvantaged communities
Opponents of risk-adjustment for social factors argue that setting the bar low for medical services in disadvantaged communities could institutionalize healthcare disparities across the country.
"The frequent use of NQF-endorsed measures for payment purposes underscores the importance of ensuring accurate comparisons of providers so that rewards or penalties are fairly assessed and based on true differences in performance," Shantanu Agrawal, MD, president and CEO of NQF, says in a prepared statement accompanying the release of last week's report, "Evaluation of the NQF Trial Period for Risk Adjustment for Social Risk Factors."
On Monday, the NQF Board of Directors released a statement announcing a new three-year study that will be designed to draw deeper conclusions about risk-adjusting performance models for social risk factors.
"We support the launch of a new, three-year initiative to build on NQF's leadership in this area and the significant knowledge gained through its recently completed trial. NQF will work with its stakeholders to secure the necessary financial support for this critical initiative," wrote Board Chairman Bruce Siegel, MD, MPH, and Board Vice Chairman Jim Chase, MHA.
"The new initiative will focus on unanswered questions about social risk adjustment of measures, including determining what data are needed and how to access them. NQF will continue to consider adjustment for social risk factors as part of its measure endorsement criteria. This vital work reflects NQF's commitment to effectively deploying measurement to decrease health disparities."
During the two-year trial, 303 performance measures were submitted to NQF for review, with about one-third of the measures categorized as "outcome or intermediate outcome" metrics. Out of those outcome measures, 93 utilized risk adjustment in some manner.
Risk-adjustment models during the trial featured more than a dozen social risk factors, including race, distance from clinics, marital status, language, and country of origin. "Race, ethnicity, and payer (including Medicaid status) were the most commonly examined variables," the report's authors wrote.
In addition to not finding expected correlations between risk-adjusting for social factors and healthcare-provider performance, last week's report says the two-year trial encountered several roadblocks:
Paucity of data: Researchers encountered challenges finding comparable data sets of social risk factors at the individual level, and they struggled to include community-based data into risk-adjustment models. "NQF recognizes the current limitations of data availability but encourages developers to continue efforts to explore alternative data sources," the report's authors wrote.
Conceptual basis of research: The approach to identifying potentially impactful social risk factors during the trial lacked consistency, with 65 risk-adjustment models picking social factors for inclusion based on literature reviews that were largely speculative on the impact of social risk factors, and 19 models selecting social risk factors for inclusion based on data from prior research. "The conceptual model has been identified as a potential area for greater specificity," they wrote.
Risk-model remodeling: Accounting for social risk in medical-treatment performance measures remains an imprecise science and risk-adjustment for social factors must be optimized before conclusions are drawn on their impact.
Richard Humphrey will leave Texas Health Resources to take the chief financial officer role at Parkland Health in Dallas.
Parkland Health & Hospital System has named Richard Humphrey, CPA, MBA, as the large Dallas-based safety net hospital's executive vice president and CFO.
Humphrey currently serves as senior vice president of Arlington-based Texas Health Resources.
"Uncertainty is a given in the complex and evolving healthcare industry today," Fred Cerise, MD, MPH, Parkland's president and CEO, said Monday in a prepared statement. "Richard's extensive experience in healthcare finance will be invaluable as we navigate the challenges facing Parkland in the months and years ahead and strive to use resources effectively and efficiently to deliver care."
Humphrey is set to begin working at Parkland on Aug. 21.
In comments to HealthLeaders, Humphrey identified reasons why Parkland is a good fit for his career:
"The organization has a compelling mission and vision as well as a new world-class facility, but they also have a defined strategy for the future."
"As a member of Parkland’s senior executive team I will be able to collaborate with leaders and staff as we execute and refine the strategic plan."
"Although Parkland has a new facility, the operating margin is thin. I will be able to use my experience to take the lead in looking for ways to close the financial gap as we move from pay for volume to a triple aim of quality, patient experience, and cost efficiencies. In a prior setting, I was brought in to close a financial gap, and I can bring that experience to Parkland."
"I felt a strong connection with Parkland's leaders, and I look forward to working collaboratively with everyone in the system."
Parkland Memorial Hospital is an 870-bed facility linked with 12 community health centers. For the fiscal year ending September 2015, the organization posted total operating revenue at $977 million, with a $500 million operating loss.
The hospital has posted operating losses for several years and efforts to stabilize the organization's finances include a federally supervised corrective action plan adopted in 2012.
Hospitals based in Texas, which has not expanded Medicaid under Obamacare, face daunting financial challenges, Humphrey says.
"All organizations are facing declining reimbursements that are not keeping pace with inflation. There is continual pressure on operating margins especially for public safety-net hospitals such as Parkland. Medicaid and Medicare payments are shrinking as are various supplemental government payments, and the burden often falls on the local taxpayer. It is difficult to manage high volumes of low-income and uninsured patients at the same time there is uncertainty in government reimbursement."
In addition to his new role at Parkland and current role at THR, Humphrey has held two other top healthcare-finance posts:
Vice president of finance and CFO: THR Harris Methodist Hospitals, Fort Worth, TX, which features four hospitals
Vice president of finance and CFO: Kershaw Health System, Camden, SC, a public safety-net integrated health system featuring a regional medical center
The CPA is a decorated Air Force veteran, attaining the rank of captain. He served as a nuclear-armed B-52 navigator, earning the National Defense Service, Air Force Commendation and Combat Readiness medals.
Humphrey earned an MBA from Golden Gate University in San Francisco and a bachelor of science degree from Carson Newman University in Jefferson City, TN.
In addition to his CPA, he is a certified internal auditor (CIA), certified healthcare financial professional (CHFP), certified treasury professional (CTP), and a fellow of the Healthcare Financial Management Association (FHFMA). He served in the Air Force as an officer and B-52 navigator.
Research using claims data from Medicare raises questions about the relative cost-effectiveness of inpatient care and post-acute-care in a skilled nursing facility.
New research on the cost-effectiveness of inpatient care at hospitals compared to skilled nursing facility (SNF) care is based on a technique used to compare hospital performance, the study's lead author says.
"When you compare hospitals, the big concern is [that] they treat different patients, which makes it very difficult to compare outcomes or how hospitals treat people. But now, we have a new way of comparing very similar patients who go to different hospitals," Joseph J. Doyle, Jr.
Doyle is a professor of applied economics at the Massachusetts Institute of Technology. He and colleagues at MIT and Vanderbilt University are using Medicare ambulance-service claims data to compare spending and other performance measures at hospitals.
The study Doyle published this month in the Journal of Health Economics, "Uncovering Waste in U.S. Healthcare: Evidence from Ambulance Referral Patterns," examined average 90-day spending on more than 1.5 million Medicare patients.
The research shows that hospitals that spend intensively on inpatient care and send patients home rather than to a SNF generate lower one-year mortality rates than hospitals that spend more intensively on post-acute-care at SNFs.
"We characterized the types of hospitals that get better outcomes. [They] tend to be more intense on the inpatient side. It doesn't necessarily have to be length of stay. Hospitals with better outcomes could be doing more inpatient procedures, for example," Doyle says.
"These hospitals treat patients more intensively during their inpatient stay, then they send people home instead of sending them to SNFs."
More Research Needed
While this finding is provocative, more research is required to draw conclusions on the relative cost-effectiveness of inpatient care vs. SNF care, he says. "We are able to characterize the hospitals that get good outcomes, but it's a leap to say we should all mimic the type of care that is given in those hospitals."
"Maybe the hospitals that spend more intensively on inpatient care and send patients home have better doctors and better nurses; it's possible that there are many characteristics of hospitals that result in that type of treatment profile."
In addition to further research to determine whether other hospitals can replicate the mortality outcomes of hospitals with an inpatient-care-intense treatment profile, more research is necessary to examine the cost-effectiveness of SNF care, Doyle says. "This spotlight is suggesting that we should take a close look at post-acute-care."
Comparing the treatment outcomes of patients who are sent home rather than to a SNF after inpatient care is prime area for future research.
"For patients where it is not obvious whether they should go home or go to a SNF, we should have studies that either historically or, even better, prospectively, randomize those patients to either go with home-health care or go to a SNF… If we send more people home, do we achieve better outcomes or not?"
In addition to the tantalizing findings about inpatient care and SNF care, Doyle's latest research casts doubt about earlier comparative research conducted on hospital performance.
"There is a large literature that suggests it really does not matter what hospital a patient goes to for care, in terms such as survival rates from a heart attack. We are concerned that earlier hospital comparisons did not take into account that the patients were different. We say it does matter where you go," Doyle says.
"If it doesn't matter where you go, then people could say high-intensity hospitals are wasteful."
With Republican efforts to repeal and replace Obamacare in disarray, several healthcare-provider organizations are calling on Congress to set aside party rancor and cut a bipartisan deal on healthcare reforms.
"The best approach would be for Congress members to reach across the aisle and address some of the specific problem areas of the Affordable Care Act," Elizabeth "Betsy" Ryan, JD, president and CEO of the New Jersey Hospital Association, told HealthLeaders today.
"To me, letting Obamacare fail would be a dereliction of government’s responsibility to the people. This is not just a political fight to be won—these are real people, real families, whose healthcare is at stake."
Partisan congressional approaches to repealing, replacing, or repairing the PPACA are likely destined for the scrapheap, Nicholas Schilligo, MS, vice president of public policy at the Chicago-based American Osteopathic Association (AOA), told HealthLeaders today. "Any meaningful solution is going to require bipartisan discussion, including hearings that thoroughly examine and vet a lot of the issues that are going to be put forward."
This past weekend's collapse of the Senate's Obamacare repeal-and-replace bill, the Better Care and Reconciliation Act (BCRA), prompted Majority Leader Mitch McConnell to call on his Senate colleagues to pass repeal-only legislation. The Kentucky Republican's repeal-only plan includes a two-year grace period to give Congress time to craft a replacement for the Patient Protection and Affordable Care Act (PPACA).
McConnell's repeal-only proposal would land a crushing financial blow on healthcare providers, Ryan says.
"A repeal of the ACA without an adequate replacement would be devastating. Hospitals and other healthcare providers conceded billions of dollars in federal funding under the ACA, because they knew those reductions would be balanced by more insured patients. If we lose both—federal funding and healthcare coverage—it would be unsustainable for our healthcare system, and that would impact all of us."
Allowing the Obamacare insurance exchanges to collapse would also have a negative impact on healthcare providers and patients, Schilligo says. "It would be devastating to patients, hospital systems, and physicians. It would be a huge step backward from where we were and where we have gone. De-stabilizing the insurance market would compromise patients' access to care that they need to resolve their comprehensive and complex healthcare needs."
Congress should take action as quickly as possible to stabilize the PPACA exchanges, Herb Kuhn, president and CEO, of the Missouri Hospital Association, told HealthLeaders today.
"Although the ACA's marketplace is fragile—Missouri was one of a handful of states that could have had 'bare' counties in 2018—it is functioning. Most other aspects of the law are working; although there are holes, including 19 states that have opted out of Medicaid expansion. Nonetheless, failure could occur—by not addressing the marketplace subsides, not enforcing the individual mandate, or indifference to other aspects of the law."
Following the collapse of Republican-senator support BCRA, President Donald Trump's renewed calls to take no action on the Obamacare exchanges and allow the individual insurance market to implode are misguided, Kuhn says.
"What's certain is that, absent repeal, the ACA's demise is unlikely to occur overnight. If the ACA is destined to collapse, it could be a long and excruciating end with millions of Americans sharing the pain."
A key element of Indiana University Health's self-distribution model is to combine manufacturer-contracting gains with efficiency gains realized at a new IU Health Integrated Service Center.
Indiana University Health is banking on efficiency and financial gains from the organization's new supply-chain strategy, which is centered on a high-tech warehouse under construction and set to be fully operational in the fall.
Starting with the Indianapolis-based health system's 15 hospitals, IU Health is establishing a robotically enhanced self-distribution model, Dennis Mullins, senior vice president of supply chain, told HealthLeaders last week.
"What we are attempting to do is to truly integrate and standardize our logistical footprint as an organization… Our current model is to use a third-party distributor as the intermediary with the manufacturer of goods."
By negotiating contracts for goods directly with manufacturers, IU Health expects to cut sweeter contract deals, he says. "Distributors make money on both ends. They charge a fee to the manufacturer to manage their goods, and they charge us a distribution or handling fee to get the goods to us."
In IU Health's self-distribution model, the potential financial gain from goods contracting alone is significant, Mullins says. "There is anywhere from a 2% to a 5% opportunity."
A key element of the health system's self-distribution model is to combine manufacturer-contracting gains with efficiency gains realized at the new IU Health Integrated Service Center (ISC) warehouse in Plainfield, IN. The 300,000-square-foot facility will be equipped with a high-velocity robotic goods-picking system that is expected to double goods-picking speed.
"The pick process will start with the robots, then goods will move on a conveyor-belt system at a high velocity," he says.
The robotic picking system is designed to boost efficiency in several ways, including reductions in the number of workers required to operate the warehouse's distribution floor.
"As the bins move on the conveyors, there is a spot where we weigh the bins. We know the weights of the goods, so we know what the bin should weigh. If the weight is off, the bin will off-shoot and we will check for quality assurance. We will open the bin and find out why the weight is not enough or too much. There are a lot of efficiencies to be gained."
The bulk of the health system's $9.2 million investment in the high-tech warehouse will be in the robotic picking module that IU Health has purchased from a third party, a data-driven warehouse management system, and equipment, Mullins says. IU Health has a 12-year lease on the facility structure. "We will pay back on this $9 million to $10 million investment in 2.4 years."
IU Health ISC by the numbers
Initial annual supply-chain expense savings estimated at $3 million
300,000 square feet of total facility space
35,000 square feet of office space
About 120,000 square feet for internal supply-chain distribution growth beyond the health system's hospitals such as pharmacy, information technology, clinical engineering, and print shop
Approximately 110 IU Health supply chain staff will work at the ISC. About 40 workers will run the facility, with the remaining staff working in the new facility's office space.
IU Health is planning to roll out the health system's self-distribution model in two main phases:
Phase I is slated for completion in the fall, when the ISC is expected to be fully operational and servicing the supply-chain needs of the health system's hospitals.
Phase II is a longer-term initiative aimed at meeting the supply-chain needs of as many as 400 other IU Health locations.
"The ultimate goal is for the new facility to meet all of IU Health's supply-chain needs throughout the organization," Mullins says.
Reaching that goal requires planning far beyond getting the IU Health ISC fully operational, he says. "I am thinking down the road about who we are going to be as an organization and who we are going to service—not on Day 1, but two or three years from now."
Cutting hundreds of billions of dollars from Medicaid, as the GOP's Better Care Reconciliation Act proposes, makes no sense to some healthcare leaders.
In the healthcare industry, the chorus of alarm over congressional proposals to slash Medicaid is thunderous.
In a joint letter to Senate leaders released Friday, the presidents and CEOs of America's Health Care Plans (AHIP) and the BlueCross BlueShield Association called the latest amendment to the GOP bill "unworkable," and said it "would harm consumers who are most in need of coverage."
Ignoring these voices bears the risk of shuttering hundreds of rural hospitals, shredding the financial fabric of thousands of communities, and signing death certificates for people who could live longer lives.
Specifically, here's what some healthcare industry executives have told HealthLeaders Media recently:
Otis Brawley, MD
Chief Medical Officer
American Cancer Society
Atlanta, GA
ACS researchers have already published declines in health disparities in the diagnosis and treatment of several cancers in states that expanded Medicaid, with no change in states that have not expanded.
We see more breast, colon, and cervical cancer screening. There are signals of more accurate diagnostics and improved quality of treatment. We have also seen differences in smoking cessation, with more efforts and more success in states where Medicaid was expanded.
As a health-outcomes epidemiologist, I see provision of adequate care to include preventive services, such as smoking cessation, appropriate screening, diagnostics, and treatment as a human right. The declines in Medicaid are most concerning in that they will decrease preventive measures and early treatment.
Stuart Hill, MBA
Vice President and Treasurer
Unity Health
Searcy, AR
The Arkansas Hospital Association has estimated that one-third of those who obtained coverage will lose it. That will obviously increase our deductions and bad debts, and hinder the future delivery of healthcare services, particularly for the rural safety-net hospitals. [About a quarter-million Arkansas residents gained health coverage through Medicaid expansion.]
Herb Kuhn
President and CEO
Missouri Hospital Association
Jefferson City, MO
States like Missouri will be in a significant bind. Costs to care for the most expensive categories of Medicaid enrollees continue to rise, and the state is unlikely to have—or to generate—the revenue to absorb cuts to the federal share of the Medicaid partnership.
This is especially true in states like Missouri that rely on provider taxes to support their programs.
There is significant inequity built into the Senate's Better Care Reconciliation Act. The 19 states that did not expand Medicaid under the Affordable Care Act will forego $737 billion in net federal Medicaid outlays throughout a decade, compared to states that have opted to expand the program.
These states, including Missouri, have already fallen behind. Federal cuts will only exacerbate the inequity, creating have and have-not states.
Medicaid's largest enrollment category is children. It's most expensive category is the aged, blind, and disabled. The low-cost, high-value of investment in children's health is indisputable. The necessity of caring for the impoverished elderly and the disabled is equally undeniable. The discussion meets at the intersection of value and values.
In Missouri, one of the most vocal advocates for Medicaid expansion was the Missouri Chamber of Commerce and Industry. They recognized that a system that doesn't address the cost of the uninsured is a system that passes along costs and delivers poorer results.
Peter Wright, FACHE
President and CEO
Valley Regional Healthcare,
Claremont, NH
Over the years, the Centers for Medicare & Medicaid Services and Congress have toyed with 1% and 2% cuts here and there on physician payments or hospital payments for Medicare and Medicaid. These guys are talking about taking nearly $800 billion just out of Medicaid.
If this were to go through the way it is today, you would see loads of hospitals across the country start to go out of business.
We are the third largest employer in the county. We employ about 350 people, and we don't just employ people. Our average wage is higher—we are employing the higher-wage people in our community.
We're already filling a hole in our budget. It was $5 million a few years ago, it was $4 million last year, and it will be $3 million this year. We're starting to dig out, but we are starting to dig out because of the ACA.
They are cutting payments to Medicare and Medicaid. That means the cuts are going to disproportionately affect people in poorer communities and in older communities. This is not going to hit Nashua, New Hampshire, which has a low percentage of Medicaid patients. This is going to hit Plymouth. This is going to hit the North Country. This is going to hit the places in the state where the need for care is the most.