Chrysler is close to a deal with the United Automobile Workers to finance retiree healthcare that is crucial to the company's bid for more government aid, according to people with knowledge of the negotiations. Chrysler has agreed to give more than 20% of its stock to a UAW-administered trust to pay for half of its $10.6 billion obligation for retiree healthcare, they said.
With so many patients deferring routine screening or medical attention for their aches and pains, will it eventually be more difficult to give, or too late?
Will treatment be more complex, with longer and poorer recovery, more invasive with longer stays in acute settings, higher risk of infections and other unintended consequences? Will it then be more expensive for everybody?
Might undetected cancer be given time to spread or untreated cholesterol turn into life-threatening artery blockages, or high blood pressure evolve to a stroke?
Lots of questions but few answers with hard data so far, physicians and hospital officials say. The economic downturn is still too short-lived. It depends on how long it lasts, how long patients put off care, and whether the Obama administration will find any broad solutions.
But there is no question that the volume of patients seeking care is down in physicians' offices.
In hospitals, elective procedures are down 31% between the third quarter of 2008 and the third quarter of 2007, according to an American Hospital Association survey last November. Admissions are down 38%. And that can't be anything but harmful to public health.
Patients are putting off regular mammograms, colonoscopies, pap smears, blood sugar, and cholesterol tests.
Dr. Robert Epsten, gastroenterologist in San Diego, worries about his many patients he said haven't gotten necessary colonoscopies over the last year because, they told him, they can't afford their $250 deductibles or $30 co-pays.
"It takes seven to 10 years for a polyp to become cancerous," he says. "But the problem is that you don't know until you see the patient where they are in that time frame. We like to say, only two things can happen when you don't get a colonoscopy: nothing or something very bad."
And they also are putting off procedures.
"We are seeing patients delay treatment for things like torn rotator cuffs or knee cartilage, because they lost insurance or can't afford to miss work because a spouse was laid off or work is spotty," says Longview, WA, orthopedic surgeon William Turner, MD.
"Paradoxically we also get patients who are pressing to have surgeries that seem premature because their insurance is running out in a few months," he says.
Marc DeHart, MD, an orthopedic surgeon based in Austin, TX, says, "The people we worry about are those rare cases with gnawing, aching pain that is really a tumor, that isn't known without expensive diagnostics." When patients lose their jobs and become uninsured or are strapped for cash, they do defer care, he adds.
"Our elective cases are down 20% to 30%" between the first quarter of 2008 and the first quarter of 2009," DeHart says. "If they had the resources, they might come in sooner, but they may put it off. And this economy makes that problem worse."
DeHart says he hasn't noticed a decline in patients getting hip or knee replacements so far. That may be because those surgeries in general occur in people who are eligible for Medicare, and by the time they come in, they really need those operations.
"When people think of having an operation that big, they're waiting until they're ready and they can't go on much further without having that done," he said. "They wait until they can't walk anymore," DeHart says.
But for those who are cash strapped or uninsured, many stoically soldier on, enduring pain, perhaps engaging in activities less or not at all.
Even if they still have insurance, the economic crisis may mean the money they would have spent on medical or drug co-payments must be used instead for rent or mortgage payments.
Cecil Wilson, an internist in Winter Park, FL, and American Medical Association board member, says it's a fair assumption that in general, people who postpone care will need it more acutely when they finally get it.
"We do know from studies that people who approach Medicare age and know they'll be covered by Medicare, may put off care" until age 65, he says. "There's always a boost in the amount of care they need then."
"We already know that the reason we treat these diseases early—especially high blood pressure and diabetes—is that untreated down the road we see an increased risk of heart attacks and strokes. Interruptions in regular care and treatment do put patients at risk," Wilson says.
"We have the evidence that the sicker people are when they do get care, it's usually in a much more expensive setting like an emergency room, and there's a higher risk of complications down the road. There's a higher risk of dying," Wilson says.
JPS Health Network administrators say several patient safety issues could be addressed if the Texas-based, taxpayer-supported hospital district does away with handwritten records and combines its paper files and various computer systems under one electronic medical record system. But the estimated cost of the project is $150 million, about one and a half times the cost of building the 108-bed pavilion that opened last year. JPS board members are expected to vote soon on a strategic plan to overhaul medical records.
In today's economy, it's becoming apparent that what we consider "health" needs to be redefined, argues Dee Edington, PhD, director of the University of Michigan's Health Management Research Center in Ann Arbor.
In quality terms, the current healthcare model needs to move away from its structure of waiting for defects—and then trying to fix those defects. In other words, the system waits for patients to get sick and then treats them. But this has created a failed healthcare strategy that is posing a major threat to business survival, says Edington, author of a new book, Zero Trends: Health as a Serious Economic Strategy.
"Companies are going out of business because we don't pay attention to healthy people. Our whole country, as we all know, just waits for sickness," he told a Washington audience earlier this month. "Nobody cares about health except for the individuals themselves, and they don't even care because they think, 'It's not going to happen to me.'"
Edington doesn't consider his comments a shot across the bow aimed at healthcare providers. Instead, he sees it as an idea that providers—as employers themselves—can embrace and adopt for their own employee populations. One Michigan healthcare organization, Allegiance Health System, has already taken his suggestions on keeping its employees on the healthier side.
To change the conversation about health in today's environment, Edington proposes five areas of change:
Move from health as the absence of disease to health as vitality and energy. Companies can no longer wait for their employees to become sick. Instead, they need to realize that keeping people healthy adds value on both sides: Costs related to disease are lower while productivity increases.
Move from caring only for the sick to enabling people to stay healthy. A culture needs to be developed that individuals are "winners" when it comes to health. Some corporate and community cultures are starting to change, and governments have put their stamp on change by legislating smoke-free environments or mandating safety belt laws. But more is needed, Edington says. Employers can help by recognizing and rewarding employees for staying healthy. "Set the incentives for healthy choices. Reinforce every touch point, every e-mail. Every time CEOs have a chance to talk, let them talk about the healthy culture," he says.
Move from the cost of healthcare to the total value of health. Governments and organizations generally have focused on how much it costs for someone who is sick. However, the total value of someone's health should be much more than that, he says.
Move from individual participation to population engagement. Health promotion or wellness programs have gone down the wrong path, Edington says. "If you try to change a person or provide something where people can change, then where do they go?" he asks. "You can't put a changed person back into the same environment because what happens? They go right back." Instead, shifts need to be made that keep entire populations in mind. Whether it's a company or a government, strategies aimed at entire populations need to be kept in mind that encourage, for instance, compliance with activities such as exercising or smoking cessation.
Move from behavior change to a culture of health. All too often, a "blame the victim" mentality has emerged for those who drink too much or do not exercise enough or do not eat healthy foods. The solution was to "sentence" them to behavior change programs, which often fell short of their goals, he says. Instead, more encompassing changes need to take place across the culture through vision and commitment that encourage healthier behaviors.
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FTC Chairman Jon Leibowitz has named six senior staff members with backgrounds in the private sector, in the public advocacy, academia, and government.
The new appointees are:
Richard A. Feinstein, appointed director of the Bureau of Competition, who is rejoining the FTC from a partnership at Boies, Schiller & Flexner LLP, where he focused on antitrust litigation. He was formerly an assistant director in the FTC's of Competition's Health Care Services and Products Division, focusing on antitrust enforcement, including anticompetitive practices and mergers involving healthcare providers and payers, and anticompetitive conduct in the pharmaceutical industry. Feinstein worked previously at McKenna & Cuneo, LLP, and he was a trial attorney and supervisor in the Antitrust Division of the U.S. Department of Justice.
David C. Vladeck, who will serve as Director of the Bureau of Consumer Protection, has been a professor of Law at Georgetown University Law Center, teaching federal courts, government processes, civil procedure, and First Amendment litigation. He co-directed the center's Institute for Public Representation. Vladeck spent almost 30 years with Public Citizen Litigation Group, including 10 years as director.
Joseph Farrell, who was named Director of the Bureau of Economics, has been a professor of Economics at the University of California, Berkeley, where he has been chair of the Competition Policy Center and an Affiliated Professor in the Haas School of Business. He also has served as deputy assistant attorney general and chief economist for the Antitrust Division of the U.S. Department of Justice, and as chief economist for the FCC. His research has centered on competition policy, compatibility standards, and innovation. Farrell is a Fellow of the Econometric Society.
Susan S. DeSanti, who will be director of Policy Planning, joins the FTC from Sonnenschein Nath & Rosenthal, where she focused on antitrust counseling and litigation. She previously spent 15 years at the FTC, during which she helped develop federal antitrust policy in standard setting, intellectual property licensing, antitrust and patent issues, generic drug entry, mergers, and joint ventures among competitors.
Jeanne Bumpus, who was re-appointed as director of the Office of Congressional Relations, has served in that position since June 2006. She was a principal advisor to Sen. John McCain (D-AZ) and served as staff director and chief counsel for the U.S. Senate Committee on Commerce, Science, and Transportation.
Joni Lupovitz, who will serve as chief of staff to the chairman, joined the FTC in 1999 as an attorney in the Bureau of Consumer Protection's Division of Enforcement and was promoted to assistant director for enforcement the following year. Since 2005, she has served as an attorney advisor in the Office of Commissioner (now Chairman) Leibowitz, focusing on consumer protection matters.
CMS released its fifth quarterly update of patient satisfaction data late last month, one year after the first Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) scores from hospitals that participated in the pilot test were made available to the public. This time around, scores from all hospitals that receive reimbursement through the inpatient prospective payment system have been included.
After the first round of the survey was released in March 2008, hospital leaders and staff members were unsure of the extent to which consumers would use the data available. It's since been shown that although some consumers have been looking at the data, they have not been using those data to choose where they receive care.
"I think it created apprehension initially because it was the first time that this type of information would be public," says Deirdre Mylod, PhD, vice president of the acute business division at Press Ganey, a vendor for administering the HCAHPS survey. "I think we've moved from apprehension clearly through to acceptance. Although patients have gone to the site, a fair amount of the research suggests that patients are not using the publicly available data—not just HCAHPS, but any of what's out there—to truly make decisions about their care."
The March release of HCAHPS scores represents survey data collected from patients discharged between July 1, 2007, and June 30, 2008. Although the survey questions have not changed since the initial survey was released, CMS has translated the survey into Chinese, Russian, and Vietnamese for 2009.
In the past 18 months, CMS has also increased its oversight of the guidelines surrounding HCAHPS, specifically about communicating with patients. Hospitals should not communicate with patients about the HCAHPS survey in a way that might affect their responses or diminish their likelihood of completing the survey.
This spring, the Agency for Healthcare Research and Quality (AHRQ) and CMS are collaborating on an HCAHPS chart book, says Carrie Brady, MA, JD, vice president of quality at Planetree, Inc., a nonprofit consulting company that helps hospitals focus on delivering patient-centered care. The book will provide hospitals with national benchmarks for each question that is asked on the HCAHPS survey. This differs from the data available at the Hospital Compare Web site, which show composite scores for each topic covered on the survey. Although hospitals could ask their vendors for benchmarks for each question, having national data offers a more complete picture.
"It'll be nice to have the full set of national data and be able to drill down into individual questions," says Brady. "Your comparative performance compared to a vendor pool, depending on the size of that pool, can tell you a different story than the national data will tell you."
Although the intent of releasing HCAHPS scores and making them available to the public was to give patients more options for choosing their care, the public scores have had a greater effect on the quality of care at hospitals around the country on the whole, says Mylod.
"CMS intended [HCAHPS] to be a public report measure for consumers," she says. "They also hoped it might spur quality improvement because of the fact of transparency. I think that, actually, the second thing has happened more than the first because consumers aren't using it to drive choice, but executives know that how they're doing is public. Clearly, there have been differences in the way people behave."
Press Ganey, a company that works with 42% of U.S. hospitals to help them improve care, analyzed the data coming out of the hospitals with which they consult from January 2007 through July 2008. During that time, large statistical increases were seen in patient satisfaction from the year-over-year data reported in May and June 2008, following the first release of HCAHPS data in March 2008. Press Ganey reported that during the 23 years it has been analyzing these types of data, this jump in patient satisfaction with inpatient care was the largest it had ever seen.
Additionally, CMS ran a large public ad campaign in major national newspapers during May 2008, publicizing the first release of scores. This resulted in a huge spike in visitors to the Hospital Compare Web site. In March 2008, just after the scores were released, about 2 million people visited the Web site. In June 2008, that number jumped to 12 million.
"There were jumps in patient satisfaction scores that clearly said to me that executives were paying attention, boards were paying attention," says Mylod. "The fact of transparency and the public report clearly drove changes in how hospitals behaved."
Brady says the improvements in patient satisfaction that CMS had hoped for are occurring, even if not as many patients as expected are choosing where they receive care based on HCAHPS scores.
"What has been the most compelling effect is that hospitals are more focused on the data," she says.
Heather Comak is a Managing Editor atHCPro, Inc., where she is the editor of the monthly publication Briefings on Patient Safety, as well as patient safety-related books and audio conferences. She is also is the Assistant Director of the Association for Healthcare Accreditation Professionals. Contact Heather by e-mailinghcomak@hcpro.com.
Many physicians market themselves not only by specialty or quality of work, but also as a go-to person for patients with specific conditions, needs, and interests. Experts say branding yourself can help differentiate your practice and also build patient loyalty, but warn that it's important to do so without compromising core values.
While more hospitals are making progress in incorporating measures to prevent medical errors, they still have a long way to go to better ensure patient safety using tested methods, according to a new report released yesterday by The Leapfrog Group, the nonprofit organization representing major private and public purchasers of healthcare benefits.
"I guess the big word is going to have to be 'disappointing,'" said Leapfrog CEO Leah Binder. The report, based on 2008 survey results received from 1,282 acute care hospitals nationwide, does show that "hospitals are making great strides and great efforts" to address patient safety concerns, she added.
However, most of the final numbers in Leapfrog's survey "are simply not adequate for the most expensive healthcare system in the world—in what should the best healthcare system in the world," Binder said. Failure to make these changes nationwide means higher mortality rates, higher volumes of care, and higher healthcare costs in the future—factors that could receive closer scrutiny during the healthcare reform debate.
For instance, Leapfrog found from the survey that only 7% of surveyed hospitals fully met its computerized physician order-entry standard (CPOE) standard. Under this measure, hospitals must enter at least 75% of their inpatient medication orders through their CPOE system. They must also assess implementation of the CPOE system with a Leapfrog evaluation tool that ensures the system is alerting prescribers of common medication errors.
The CPOE standard has been in place on the Leapfrog survey since 2002—when only 2% of hospitals met that standard, said Barbara Rudolph, director of Leapfrog's Leaps and Measures.
Research evidence has shown that use of CPOE systems could reduce adverse events by about 88%; if these systems were widely in place nationwide, over 3 million serious medication errors annually could be prevented, Rudolph added.
Also, ongoing research has also shown that nearly 3,000 deaths could be avoided annually if Leapfrog standards were used for eight high-risk procedures performed in hospitals, Rudolph said. "If hospitals were to meet our standards, they could reduce the risk of dying between two to four times."
The rate of reporting hospitals found to be fully meeting volume and risk adjusted mortality standards—or adhering to nationally endorsed process measures—for the high-risk procedures were:
43% for heart bypass surgery or coronary artery bypass graft
35% for heart angioplasty or percutaneous coronary intervention
32% for high risk deliveries
23% for pancreatic resection
16% for bariatric surgery
15% for esophagectomy
7% for aortic valve replacement
5% for aortic abdominal aneurysm repair
In other findings, the survey showed that only 31% of hospitals fully met the Leapfrog standard for staffing hospital intensive care units managed by board-certified intensivists. However, on a positive note, another 7% of hospitals said they do plan to add intensivists by the end of 2009.
"In the ICU, you can see a reduction of 40% mortality when there is appropriate staffing by trained intensivists," Rudolph said. "Overall, if this were implemented in all urban hospitals with ICUs, we could avoid 54,000 deaths annually, and avoid spending $4.3 billion on the extra care that results when there is not an intensivist in place."
As for hospital infections, 65% of hospitals do not have all of Leapfrog's recommended policies in place to prevent hospital-acquired infections. This rate, though, is an improvement over 2007 in which 87% of hospitals had no policies in place.
Compliance with Leapfrog's efficiency of care standards also was disappointing, Binder said. Under this standard, hospitals must demonstrate high quality care with low resource use. "The vast majority of hospitals couldn't improve their quality using fewer resources than what they do now."
For instance, only 24% met the efficiency standard for heart bypass surgery, 21% for heart angioplasty, 14% for heart attacks, and 14% for pneumonia. "We know . . . there are hospitals that were outstanding in this regard—that had both extremely positive outcomes and at the same time used the fewest resources of any kind," Binder said. "It is possible to do this, so we look forward to seeing great improvement of this in the future."
The Leapfrog Group 2008 Hospital Survey results, along with hospital comparisons, are available at www.leapfrog.org.
Increasingly, health systems are acquiring private practices. Accordingly, it's more important than ever for physicians to understand what their practice is worth. That means they must understand the concept of fair market value (FMV).
Valuations are crucial to crafting buy-sell agreements, mergers, and regulatory compliance. The most important thing to have before embarking on a valuation is a good set of statements and balance sheets, supplemented with good statistical information, says Martin D. Brown, CPA, a shareholder at Pershing Yoakley & Associates in Knoxville, TN.
For example, if the charges are $400,000 per physician, identify how many office visits that represents. "It helps you get your arms around what's driving the numbers," he says, adding that although one or two years' worth of data is required, three is ideal. Brown offers the following checklist of data requirements as a starting point:
Practice financial statements
Charges, collections, and adjustments
Accounts receivable and payable
Fixed asset schedule
Notes payable and lease obligations
Payer mix
Patient volume and number of active charts
Physician compensation and any discretionary expenses
Employee list, job description, tenure, and pay rate
FMV is driven by future earnings and the risk associated with those earnings, so forecasts and trends are important. "For example, there is a severe shortage of general surgeons," Brown explains. "That's a driver that would likely increase the value of that practice."
The situation might be reversed for cardiac surgery, where the demand for open-heart surgery is declining because of the availability of other therapies.
For the purpose of financial projections, it makes sense to project an increase in the patient bad-debt expense, given the current economy. It also makes sense to factor in an increase in certain supply costs. Given the current trends, a practice will probably want to project flat reimbursement rates into its calculation.
This article was adapted from one that originally ran in the April 2009 issue ofPhysician Compensation & Recruitment, a HealthLeaders Media publication.
A new survey of hospital CIOs finds that the federal government's $36 billion "carrot" of financial reimbursements to install electronic health records won't be nearly as powerful an incentive as the "stick" of reduced Medicare reimbursements if they don't.
"The stick, even more than the carrot, makes a fiscally compelling argument for adopting electronic health records," says Daniel Garrett, managing director of PricewaterhouseCoopers' health industries technology practice. "It's a small carrot compared to the amount of resources it will take to deploy this technology over the next five years. If an organization wants to have an enterprise-wide EHR up and running by 2011, they've got to start now. The incentives eventually go away and the stick will only get bigger."
The general consensus among the CIOs was that the $36 billion earmarked for interoperable EHR in President Obama's $787 billion federal stimulus package won't come close to covering the costs of implementing the nationwide system, and that hospitals are struggling to find ways to pay for the new technology.
The survey also found that:
82% of hospital CIOs have already cut IT spending budgets in 2009 by an average of 10%, with one in 10 making more drastic cuts of greater than 30%.
66% of CIOs say they expect to be asked to make further cuts in IT spending before the end of 2009.
64% of CIOs agreed that it is impossible to balance demand with the need to cut costs.
One-half of CIOs with more than 500 beds say that federal funding is "crucial" to their ability to implement EHRs.
To help drive adoption of EHR by 2015, the federal government is investing $33 billion in incentives to providers. A PwC analysis shows that a 500-bed hospital could receive an average of $6.1 million in incentives to purchase, deploy, and maintain a government-certified, interoperable EHR. By comparison, the average 500-bed hospital that fails to implement a system by 2015 could see a reduction in Medicare funding by $3.2 million or more, depending on their Medicare volume.
A recent Robert Wood Johnson survey of more than 3,000 U.S. hospitals found that only 9% were using EHR. “The numbers are disappointing and certainly lower than we thought when we went into this study,” says Ashish Jha, the lead author of the study and an associate professor of health policy and management at Harvard University. “It just suggests that these systems are expensive and difficult to put in on some level and a vast majority of hospitals haven’t felt like it’s been worth doing yet.”
Jha says hospitals shouldn’t assume that the government’s goalposts on EHR incentives and deadlines can’t be moved. “I wouldn’t be surprised if there was more money that came flowing into this topic from the federal government, beyond the money that is already there,” he says. “Given the way politics works, I wouldn’t be surprised if the stick that goes in effect in 2015 goes away. A bunch of hospitals will lobby Congress and Congress says no penalties for a couple more years.”
PwC estimates that the average three-physician practice can expect to invest between $173,750 and $296,000 over two years to purchase and maintain an EHR system. Individual physicians, not practices, can receive up to a total of $44,000 each for adopting certified EHRs. Like hospitals, the penalties may be severe enough to motivate compliance with government-certified systems.
While providers may realize some return on their EHR investment, the primary return on investment is expected to mostly accrue to private and public payers. The federal government estimates that the conversion to digital records will save $12 billion in healthcare spending over 10 years, which presumably would be seen in lower Medicare and Medicaid outlays. Since hospitals are the biggest beneficiary of government health spending, they are most likely to experience the biggest reductions.
"Some of the hardest work to be done in healthcare reform is still undone—that of an overall alignment of financial incentives from acute care and disease to wellness and prevention," says David Levy, MD, PwC's global healthcare sector leader. "Ultimately, technology may enable the capture, analytics, and transparency required to make a patient-centered health system a reality."
The amount an individual hospital will receive in health IT stimulus funding has nothing to do with how much it spends on the technology. The funding hinges on its Medicare, Medicaid, and charity care volumes, which can differ radically from hospital to hospital.
The Congressional Budget Office says the $36.3 billion in EHR incentives will be rebated between 2009-2015 for providers who adopt EHR. From 2016-2019, however, the federal government anticipates cost savings of $15.5 billion in part because of the presumed money-saving efficiencies of healthcare IT, and also because the government in 2015 will begin to trim reimbursements for providers who aren’t “meaningful users” of electronic medical records. The term “meaningful user” has yet to be defined.