The shutdown of a Canadian nuclear reactor that is a crucial supplier of medical scanning isotopes is interrupting care to patients and hindering suppliers. Doctors are worried the Ontario-based plant, run by Atomic Energy of Canada Ltd., could be down for a prolonged stretch or may never restart. Either scenario would further snarl a supply line running through Cardinal Health Inc., MDS Inc.'s Nordion unit and privately held Lantheus Medical Imaging Inc., among other companies.
CVS's Minute Clinic, Target's Clinic, The Clinic at Walmart, Walgreens' Take Care Health Clinic—what do they have in common? They are part of a growing breed of retail clinics that provide fast, low-cost, convenient care for customers. They are also located in more affluent communities, according to a new study from the University of Pennsylvania School of Medicine.
Most retail clinics, also called convenient care clinics, tend to be located in areas of higher incomes with higher percentages of Caucasian residents, according to a new study, "The Geographic Accessibility of Retail Clinics for Underserved Populations," published in The Archives of Internal Medicine in May.
The haves and the have-nots
"Retail clinics allow for convenient use of medical services for relatively low acuity needs," said Craig Evan Pollack, MD, MHS, Robert Wood Johnson Foundation Clinical Scholar at the University of Pennsylvania in Philadelphia. "They are not only designed to be convenient but are also a lower cost alternative."
However, only about 13% of the nearly 1,000 U.S. retail clinics are located in underserved communities, that is, areas designated by the Health Resources and Services Administration to have fewer primary care physicians, higher infant mortality rates, poorer populations, and senior citizens.
The study found that convenient care clinics are not as prominent in areas with higher rates of poverty, lower incomes, and higher percentages of African Americans and Hispanics, highlighting the socio-economical irony that these types of clinics are not located in areas where people need them the most.
"If retail clinics are to improve access for these populations, they must be located in places where they are able to be reached," states the study.
The purpose of the quickie-clinic
The retail clinic was first developed in 2000, giving consumers an option for one-stop shopping for their medical needs, while getting their groceries. Existing chain stores such as pharmacies and supermarkets offered preventative care services and quick visits for common illnesses, most often for sore throat, cold, and flu patients, according to the Convenient Care Association (CCA).
Typically operated by a nurse practitioner under the supervision of an off-site physician, the retail clinic is usually opened 24/7 for walk-in customers with no appointment needed. The visit time lasts about15-20 minutes. Retail clinics accept most insurance co-pays, including Medicare and Medicaid. For those that pay out of pocket, a clinic visit costs significantly less than going to the PCP or emergency department, with an average price of $40-$75 per clinic visit. As the lowest cost option without government support, according to the CCA, the retail clinic also boasts price transparency by clearly posting their prices for the consumer.
Since its inception, retail clinics have gained momentum, providing care to more than 3.5 million patients, according to the CCA, with the most locations in Florida, California, Texas, Illinois, and Georgia, according to the study.
Longtime proponents of retail clinics say they are advantageous for providers and hospital emergency departments, as convenient care clinics divert patient loads from overcrowded ERs and freeing up the limited number of PCPs from their already booked schedules.
For patients, retail clinics are faster, cheaper, and easier (to access) for customers who report that high levels of satisfaction, according to previous studies. In fact, 35% of retail clinic patients are self-pay, indicating that they either have high-deductible health plans or no insurance at all, according to Tine Hansen-Turton, MGA, JD, executive director of Convenient Care Association in Philadelphia.
And despite its touted benefits of aiding vulnerable populations, the retail clinic wasn't designed for the population with the greatest need, according to Pollack.
A gap in medical care?
"The convenient care industry was never devised as a safety net," according to a statement from the CCA. There already exists, in the U.S., a functional safety net with community, school-based, and rural health centers. Instead, the convenient care clinic is a niche provider, a natural extension and partner to existing medical services, said Hansen-Turton.
"We weren't designated as a safety net, but we do provide valuable access point across socio-economic [classes]," she said.
Retail clinics continue to grow in numbers, although some clinic locations are seasonal operations, according to Hansen-Turton.
Pollack admits that more research is needed. His study looked at retail clinics in proximity to where medically underserved residents live, but doesn't look at where they travel to shop or seek medical services.
"If we determine that retail clinics are beneficial…then we need to think about their current distribution and incentivize their opening in underserved communities," he said.
On May 1, the emergency room team at Beth Israel Deaconess Medical Center in Boston agreed to a game of "Tag, You're It," primarily to improve hand washing and avoid transmitting infections, but also to add fun to a rote task.
They did so in part because federal investigators were about to launch a 7-day review of the campus after of a cluster of methicillin-resistant Staphylococcus aureus infected 19 newborns and 18 mothers in another part of the hospital. Though the infections were not found in the ED, there was a concerted effort among the staff to avoid any citations stemming from heightened scrutiny, explains ED chief Richard Wolfe, MD.
Wolfe says state officials had done a preliminary review on the other campus and could not identify a cause for the MRSA cluster. "But they did find some errors in practice including hand hygiene that triggered some serious citations." As a result, he says, "we were all targeted for this very intense review." He adds, "We had not had a survey as intense as this one."
Complete hand-washing compliance is tough for even the most dedicated providers, Wolfe says. During a normal shift, one might wash hands 100 times, or six times for each of the 150 patients a day treated in the ED. "When we did internal observations, we could usually spot a miss within the first 10-15 minutes," Wolfe says.
With "Tag," any time any of the 120-member staff noticed a provider not washing one's hands before or after patient contact, the negligent staffer's name would be posted on all dashboards of all computer monitors throughout the hospital system. They read: "Tag! So-and-so is it."
The employee tagged would have to live with that rap until he or she tagged another staff member or until the end of the shift, whichever came first.
Wolfe says he thinks the game worked because "the ED did not generate a single citation."
However, three weeks after the game began, a few members of the staff, including nurses, physicians, and technicians, became "nervous" and asked to stop the game, Wolfe says. Some felt their jobs might be vulnerable in a time of layoffs, "although we had made it clear that this would not happen and there were no consequences," to getting tagged.
"But they felt that anything might come back and haunt them."
So just before Memorial Day, staff agreed to pause the game for a few weeks to regroup. Now, he says, they're going to try another approach that will not shine such a spotlight on those who lapse.
The answer, he says, appears to be a variant of the game "Assassin." Employees who are tagged will just be marked out of the game, not listed on computer monitors or anywhere else.
"To win the game, you'll have to not be caught yourself, but you still have to catch others. They'll win by staying 'alive,'" Wolfe says. The last person still playing would be the winner. There also will be a prize, such as cash or movie tickets.
Wolfe is approaching the effort with a scientist's eye as well. "We're going to let things settle down for a while to go back to baseline compliance, and evaluate how hand hygiene practices changes during a game period. Then we'll stop the game, to see if there is resilience to compliance, or whether habits will shift back to baseline."
As for the MRSA cluster, where it originated remains a mystery, Wolfe says. He hypothesizes that it was recognized and reported by the hospital after Beth Israel Deaconess started routinely looking for it. In any case, he says, no additional clusters have reappeared.
An interesting study appeared online late last month in the journal Health Affairs on "Hospital Quality And Intensity Of Spending: Is There an Association?" Well, to break the suspense, the answer is yes—there is a connection: spending more money doesn't necessarily translate into better quality care. However, this is one issue that shouldn't be simplified too much as some reports of this study have done.
To put it in perspective, the study is significant because it is one of the first nationwide analyses ever of quality and spending at the level of the individual hospital. Followers of the Dartmouth Atlas of Health Care are familiar with studies into variations in costs and care among groups of hospitals across the country within certain regions. This makes the target even smaller.
The findings of this study could have an impact on the debate in Washington over healthcare reform legislation. The Dartmouth variation numbers have been cited frequently on Capitol Hill during health reform hearings.
Legislators and President Obama both have said that a reform plan must be able to control costs and expand access to high quality, affordable healthcare. In fact, on June 2, Obama said that he was going to discuss with key senators visiting the White House how to get "top notch quality, lower costs." This meant looking at organizations, for example, such as the Mayo Clinic in Rochester, MN, which is "able to provide some of the best health care services in the country at half or sometimes even less of the costs than some other areas where the quality is not as good," he said.
In the Health Affairs study, the data is drilled down into the hospitals themselves, which is called by the researchers "a more natural unit of analysis for reporting on and improving accountability."
The researchers, from Dartmouth and Harvard, used process of care quality measures [and not outcomes measures] from the Centers for Medicare and Medicaid Services Hospital Compare database. The measures focus on three major conditions: acute myocardial infarction (AMI), pneumonia, and congestive heart failure (CHF).
These measures are determined from the percentage of appropriate patients receiving "a specific, often low cost, evidence based therapy—depending on their conditions." Performances on these measures are compared to hospital level end of life spending based on spending for chronically ill patients age 65 years or older.
Eleven process measures provided at least 25 observations for a majority of hospitals: aspirin at arrival and at discharge and beta blocker prescription at arrival and at discharge (for AMI); assessment of left ventricular function, the provision of discharge instructions, and angiotensin converter enzyme (ACE) inhibitor or angiotensin receptor blocker (ARB) prescription for patients with left ventricular systolic dysfunction (LVSD) (congestive heart failure); blood culture performed before receiving the first antibiotic in the hospital, first dose of antibiotic within four hours of admission, initial antibiotic selected appropriately, and assessment of arterial oxygenation within twenty four hours of arrival (pneumonia).
The researchers constructed a measure of spending that reflected only the specific use of services to explain a large amount of hospital spending: number of hospital days, total physician visits, intensive care unit (ICU) days, and the ratio of specialist to primary care physician visits at the end of life. (This means that the influence of varying reimbursements linked to graduate medical education, Medicare disproportionate share payments, and geographical price adjustments were removed.)
What they found after all this is that by examining process of care measures, hospitals that provide more intensive and costly care do not necessarily provide better quality care—as measured by the percentage of patients who are given evidence based treatments.
In more concrete figures, the study found that among a fifth of hospitals that spent the least, the cost of end of life care was $16,059 on average. In comparison, the cost of end of life care at the top 20% bracket of highest spending hospitals was $34,742 on average.
The researchers noted that the results might be skewed because the quality indicators they used might penalize hospitals that treat sicker patients. In addition, the study used process of care measures instead of patient outcomes which could yield different results if they were used. However, it helps demonstrate how differences in costs—and care—can be more carefully observed hospital by hospital.
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Controlling costs took center stage this week in the healthcare reform discussions taking place in Washington. Although the specifics at this point remain largely up in the air, a key passage in President Barack Obama's speech to Senate Democrats on Tuesday may hint at what will be expected of physicians in future cost-control efforts.
Obama said he would be discussing with legislators how to change incentive structures by looking at why "places like Mayo Clinic in Minnesota are able to provide some of the best healthcare services in the country at half or sometimes even less of the costs than some other areas where the quality is not as good."
Reading between the lines, it seems he's talking about overutilization of services. Or if he's not now, he will be soon.
I say that because I came across another similar reference to Mayo Clinic this week while reading Atul Gawande's, MD, comparison of two Texas towns in an article in the New Yorker.
Gawande takes the cost conundrum posed by organizations like Mayo a step further by digging into why two nearly-identical towns—with about the same number of people, similar public health statistics, and similar quality of care levels—would have a nearly $7,500 difference in Medicare expenditures per capita.
Medicare spends nearly $15,000 per enrollee in McAllen, TX, the focus of Gawande's investigation, even though its income per capita is only $12,000, while Medicare spending down the road in El Paso is half that.
The question is: Why? Is the service actually better? Are patients getting better value for the higher costs? Could malpractice fears be leading to defensive medicine?
The breakthrough came when Gawande was sitting around a dinner table one night with a group of six of McAllen’s physicians discussing possible reasons for the abnormally high Medicare spending.
"Come on, we all know these arguments are bullshit," one general surgeon finally said in the New Yorker story. "There is overutilization here, pure and simple." Doctors were racking up extra tests, procedures, and services, he explained.
Gawande certainly isn’t the first to raise the alarm about overutilization, but he joins a growing chorus of voices highlighting unnecessary tests and procedures as an argument for changing the physician reimbursement system.
Last week, for instance, Sandeep Jauhar, MD, wrote in the New York Times about the commoditization of patients and warned against overutilization through unnecessary referrals. Healthcare stakeholders, including the AMA, who three weeks ago promised to decrease the healthcare growth rate by 1.5%, followed up with specifics this week, proposing to save up to $180 billion through better utilization of care.
All seem to agree that the problem is the fee-for-service system that creates financial incentives for physicians and hospitals to focus on quantity, rather than quality.
And all seem to be converging on one solution: Bundling payments.
The details are still unclear—that may mean paying a lump sum that would cover all physician services and hospital care for one patient—but at the very least it will mean a very different environment for both physicians and hospitals.
There are other solutions up for consideration, as well. Medical imaging is a prime target, and federal officials are considering requiring physicians to get prior authorization before running a test or even reducing reimbursements for imaging services.
Whatever comes of this, the days of fee-for-service as we know might be numbered.
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Cullman Regional Medical Center in Cullman, AL, has purchased for-profit rival Capella Healthcare Inc.'s nearby Woodland Medical Center, and will shutter the 100-bed hospital next month, the Healthcare Authority of Cullman County announced this week. Terms of the sale were not disclosed.
Once the purchase is completed on July 15, CRMC says it will suspend operations at Woodland and consolidate all operations at CRMC while it explores the future use of the Woodland campus. Woodland, which had been averaging 24 in-patients per day, will no longer operate as a medical and surgical acute-care hospital after the deal is completed.
The agreement comes after years of consideration by the hospitals. The 115-bed CRMC, built in 1995, and Woodland have been marginalized over the years; Woodland operates at about 25% capacity and CRMC at 65%.
"Combining the two hospitals, instead of having us compete with each other, allows us to focus the investment of our healthcare dollars improving the quality of hospital care for the families we serve throughout Cullman County," says Stephen Donaldson, chairman of the healthcare authority, which oversees CRMC. "These additional resources will allow CRMC to add services, invest in new medical technology, recruit new physicians, and more."
The move impacts approximately 150 employees at Woodland, some of whom will have jobs at CRMC. Some employees will remain at Woodland to help the suspension and conclusion of services. It was not immediately clear how many Woodland employees would be laid off when the deal is finalized.
"While a combined hospital system for Cullman is absolutely what is best for our community and for our patients, this was not an easy decision to make," says Woodland CEO Butch Naylor. "We will be working closely with CRMC to make sure every Woodland employee is assisted through the transition."
With the sale, Franklin, TN-based Capella will now operate 13 hospitals in seven states. Capella spokeswoman Anne S. Hancock says the hospital chain "is not even remotely considering selling any of our other 13 hospitals. We made the tough decision because we know one combined, strong hospital is right for patients and for the community in the long-run," Hancock says. "This decision came after months and even years of conversations between the two hospitals about ways to partner."
Donaldson says the consolidation is part of a growing trend among small-market hospitals. "In today's economy and with all the healthcare reform going on in Washington, DC, hospitals must find smarter, better and more efficient ways to make use of dwindling resources while continuing to provide top quality care," he says.
Amid financial uncertainty, you may be trying to sell your physician practice, attract investors, or consider a merger. Do you know what the practice is worth? This will be important to find out, as valuations are becoming increasingly warranted for numerous reasons, such as facilitating hospital acquisitions; determining merger and acquisition and buy-in and/or buy-out equity; and complying to regulations relating to Stark laws, anti-kickback statutes, and IRS regulations.
Valuations provide objective and independent opinions on your practice's value, which is "driven by future earnings and the risks associated with those earnings," says Martin D. Brown, shareholder at Atlanta-based Pershing Yoakley & Associates, PC.
There are three main approaches you can take to determine your practice's fair market value (defined as the amount at which property would change hands between a willing seller and a willing buyer when neither is under compulsion and both have reasonable knowledge of the relevant facts), Brown says. These approaches are asset-based, market-based, and income-based.
The asset-based approach looks at the value of your hard, or tangible, assets as well as your intangible assets. Examples of tangible assets include medical equipment and furniture, whereas intangibles include accounts receivable and goodwill. This has become the most commonly used approach in the ailing global economy, Brown says. It is used when a practice sees historic losses, nominal cash flow, or minimal ancillary revenue, or when there's a breakup—also referred to as a "divorce"—of the practice.
The market-based valuation approach compares the practice to other similarly sized practices. It involves gathering information and valuation multiples—the method used to determine the current value of the practice, done by examining and comparing the financial ratios of relevant peer groups—based on recent sales of comparable businesses. It's also crucial to look at lease rates and adjust your practice's rate to the current fair market value.
However, practice administrators should know that the information is typically confidential, which can make it difficult to obtain and use any specific examples as a benchmark.
The income-based approach takes into account the discount and capitalization rates, both measured in percentages.
To find the discount rate, look at the interest rate used in determining your practice's current value of future cash flows. The capitalization rate, determined by subtracting the estimated long-term growth rate of the practice from the discount rate, should be used when calculating "the present value of estimated future earnings into perpetuity," says Brown.
The percentage rates for discount and capitalization typically are 18%–25% for a physician practice, 15%–19% for hospitals, and 16%–22% for ambulatory surgery centers.
The income-based approach is ideal for a practice that has been profitable and for which the future cash flow can be reasonably determined, Brown says. For example, if a practice projects that its net revenue will grow at a rate of 2% per year, this is the long-term sustainable growth rate.
It's important to first look at secure investments when determining your practice's value, then examine those considered riskier, which can include long-term investments. Look at healthcare industry–specific investments in particular, Brown says.
Also take into account valuations that are practice- and specialty-specific. When the practice and its perceived value is dependent on providers' individual skills and not necessarily the practice's location, the discount rate is increased, namely when considering a merger or outright sale. But in some circumstances, the practice could be more difficult to sell, Brown says, depending on issues such as its geographic location or the current payer mix the new owners would inherit (e.g., if the practice is paid in part through Medicaid reimbursements and subsidies).
When it comes to joint ventures (multiple-physician practices), having a controlling interest in the practice (more than 50% or a large enough percentage to block management decisions) increases its worth for the seller or buyer, whereas holding a minority interest brings the practice's value down, Brown notes, adding that healthcare valuations are often focused on minority interests.
This article was adapted from one that originally ran in the June 2009 issue ofThe Doctor's Office, a HealthLeaders Media publication.
The growing ranks of female physicians in Canada will slash medical productivity by the equivalent of at least 1,600 doctors within a decade, according to a new analysis of data indicating that female MDs work fewer hours on average than their male colleagues. The paper comes a year after a blue-chip list of medical educators publicly condemned what they called the scapegoating of women for Canada's severe doctor shortage. Mark Baerlocher, MD the study's lead author, acknowledged he is tackling a thorny issue, but stressed he does not favor curbing the number of female physicians. Instead, the study calls for greater increases in medical-school enrollment to offset the findings.
An anonymous emergency physician recently concluded a malpractice trial and is blogging about his experience. The blogger notes that names and minor facts about the patient and his family have been changed, but everything else is true.
The Obama administration wants Medicare Payment Advisory Commission to have real power so that it can tweak Medicare payments on an ongoing basis, instead of waiting for massive healthcare reform to fix everything at once. One option would make MedPAC part of the executive branch, another would give it authority to fast track its yearly recommendations through Congress.
