Sisters of Charity of Leavenworth Health System hired Joe Jeans as CFO at Providence Medical Center in Kansas City, KS, and Saint John Hospital in Leavenworth. Jeans is responsible for the hospitals' day-to-day financial operations, plays a key role in developing and implementing financial strategy and serves as the organizational responsibility officer. Jeans started as CFO on Oct. 26. He succeeds Juanita Roy, who was promoted to the hospitals' COO.
Tenet Healthcare Corp. has announced that Creighton University Medical Center has named Gary Honts as CEO. Honts has served as interim CEO at CUMC since May 25. As CEO, Honts will oversee strategic, operational, and clinical activities for the 334-bed tertiary care hospital located in Omaha, NE. Previously, Honts served as CEO of Tenet's Community Hospital of Los Gatos. He has held positions as executive vice president and chief operating officer at Atlanta Medical Center and vice president of operations at St. Joseph Hospital. He also served as executive vice president and chief operating officer at Hilton Head Hospital.
Economists are debating whether the nation is enduring a U-shaped or a V-shaped recession. The U-shaped recession means a more gradual recovery—particularly one that sees limited if any job growth. The V-shaped recession tanks quickly and recovers quickly, too.
The overall economy appears to suffering from a bad case of U-shape. Record levels of unemployment are not expected to be alleviated until well into next year, if then.
For hospitals, however, a rich vein of raw data, reports, and surveys released over the last several weeks, give us a good idea of how difficult 2008 was, but also suggest that hospitals are now operating on the upward side of the V.
For starters, the American Hospital Association Hospital Statistics for 2010 guide reported that the nation's 5,010 nonfederal community hospitals saw profits fall to $17 billion in recession-wracked 2008, thanks in large part to investment losses that accounted for $4.4 billion in red ink. The losses, contrasting with the record $17 billion in investment income in 2007, means that hospitals saw a negative swing of $21.4 billion in investment income over two years, as overall net profits fell by about 60%, from $43.1 billion in 2007, to $17 billion in 2008.
A separate report from the Center for Healthcare Improvement at Thomson Reuters found that 80% of hospitals were back in black by the second quarter of 2009, with overall margins approaching levels not seen since the economy tanked. In 2008, the same report found that half of the nation's hospitals were bleeding red ink.
"If they had a 401(k) statement to look at, it'd be lower than it was two years ago. But in terms of the operational financial statistics like margins and liquidity, it looks like hospitals in large part have returned to prerecession conditions," Gary Pickens, the study's author, told HealthLeaders Media when the report was released. "The market conditions have improved. Investment income is back. Hospitals no longer have to take realized losses. From a liquidity perspective, we have seen cash on hand rebound pretty substantially."
Finally, monthly employment data issued by the Bureau of Labor Statistics found that the nation's hospitals reported a surge of 10,000 payroll additions in October, even as the overall unemployment rate hit a 26-year high of 10.2%. October represents the largest single month of hospital job growth since December 2008. In September, hospitals added 7,300 jobs, and the two months account for nearly half of the 37,500 hospital payroll additions reported so far 2009.
Have hospitals gotten their hiring mojo back?
David Bachman, a Cleveland-based independent healthcare analyst, believes they have. "There has been an improvement at the hospital level that has allowed them to ease up on the cost containments," he says. "To the extent that they can, hospitals do not want to get caught not operating at appropriate levels in terms of staffing because that is going to hurt them in the long run. Job growth may not come back to historical levels, but over the next 12 months it will definitely be up from what we have seen through much of this year."
Along with their recovering investment portfolios, Bachman says hospitals are also becoming less anxious with the idea of healthcare reform. "In the last couple of months, that picture is looking better than people had initially thought," he says.
There are icebergs bobbing out there, however. Bachman says a sustained recovery for hospitals will have to be accompanied by a sustained recovery for their investment income, and with the overall economy. "If we see the stock market take another dip, that is going to have a direct and indirect impact on hospitals," he says.
But he suggests that a slightly bearish economy would not be completely bad for hospitals. "As I've looked at hospital operating margins this year, a huge source of their operating efficiency gains have been on lower salary and wage costs. Some of that has come from more subdued hiring but a lot of it has come from lower turnover," he says.
"The overall unemployment figures look pretty weak, and that could work in the favor of hospitals in terms of their keeping their salary and benefits inflation in check." Of course, fewer people working in the overall economy means more charity or government-sponsored care, which means lower reimbursements, if any. "There is pressure on healthcare utilization, which could hurt them, but a lot of that would be offset by the margins gained from lower wage pressures," Bachman says.
While there is still plenty to be anxious about, the overall trends of the last few months are clearly showing that the worst of the recession is over for hospitals. That doesn't necessarily mean it's time to dust off the blueprints for the new atrium, or to announce healthy bonuses for the C-suite. But, hospital professionals should take some satisfaction in knowing that—for the most part—they've withstood heavy and unforeseen financial hits, dealt responsibly, compassionately, and intelligently with the worst recession in 70-plus years, and now appear positioned for a healthier future.
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House Republicans, frozen out of the healthcare reform debate in many areas this year, jumped on the opportunity this past weekend to criticize Democrats through a new analysis of the House reform bill (HR 3962) from the Centers for Medicare and Medicaid Services' (CMS) Office of the Actuary. The analysis, by Chief Actuary William Foster, said that the bill may not bend the healthcare cost curve.
The analysis, requested by House Ways and Means Ranking Republican Dave Camp (R MI), predicts that between 2010 and 2019, the overall national health expenditures would increase by $289 billion, or 0.8%, from baseline projections established earlier this year. The national health expenditure share of the gross domestic product would rise to 21.1% in 2019.
"It's now beyond dispute that their bill will raise costs," said House Minority Leader John Boehner (R-OH) in a statement on Saturday. He added that instead of working with the GOP on reform, Democrats have ended up with "a healthcare monstrosity" that could "make things worse" for middle class families and small business. Instead, he called for Democrats to "toss their current proposal" and work with the Republicans on a new plan.
The report noted that Medicare cuts contained in the healthcare bill approved by the House on Nov. 7 could be costly to hospitals, nursing homes, and home health--and that providers could stop taking Medicare altogether in the next decade.
Payment update reductions would provide a "strong incentive for institutional providers to maximize efficiency," but it "is doubtful that many could improve their own productivity to the degree achieved by the economy at large." Congress could intervene to avoid such an outcome, but "so doing would likely result in significantly smaller actual savings" than is currently projected, according to the analysis.
Implementation of comparative effectiveness research, meanwhile, could translate into national health savings of about $8 billion annually from 2010 through 2019. This savings would develop gradually with changes in provider practice and culture, the analysis said.
However, "negligible financial impact" would be expected over the next 10 years for other proposals emphasizing prevention and wellness efforts to lower costs.
The actuary report does not go into the tax impact of the bill's proposals--suggesting that will be done by the Congressional Budget Office and the Joint Committee on Taxation. Their estimations for the Senate bill are expected any day.
The National Quality Forum (NQF) has released the Quality Data Set (QDS), a common technological framework to assist in defining clinical data used in measuring performance and evaluating improvement in patients' quality of care. The QDS framework will provide a standardized set of data that should be captured in patients' electronic health records and is applicable to all care settings a patient is likely to use in his or her lifetime.
The framework consists of:
Standard elements, such as a code list for a specific condition such as diabetes, or a medication such as aspirin
Quality data elements including information describing the context of use in the clinical care process, such as a past history of diabetes or the administration of aspirin
Data flow attributes, such as the sources of the information including who is providing the standard and quality data elements and what the care setting is
"Providing a common data resource for all stakeholders in the quality measures supply chain will allow us to align our efforts and improve the comparability of quality reports while dramatically reducing the burden of quality measurement," said Paul Tang, MD, MS, chair of the expert panel that drafted the QDS.
The structure "will continue to grow and expand to meet future needs of quality measurement," said Tang, who is vice president and chief medical information officer at the Palo Alto Medical Foundation and consulting associate professor of medicine at Stanford University.
To date, collecting and reporting "meaningful" healthcare performance data has been a manual process, which could lead to inconsistent results. The QDS is designed to act as a dictionary for quality measurement, according to the NQF—providing a standardized core set of data. NQF soon will begin requiring measures submitted for endorsement to include "e specifications" that align with the QDS framework.
"We are so pleased that we now have this fundamental building block for quality measurement and improvement," said Janet Corrigan, NQF president and CEO. "The Quality Data Set will help ensure that measure developers use common data definitions and conventions when specifying measures for use with electronic health records."
By using a common language to describe the information within quality measures, the QDS will permit quality measurement from a variety of electronic sources, such as electronic health records, personal health records, registries, and health information exchanges.
"Which Sacramento area hospitals have the lowest C-section rates?" At one, it's 1 in 5. At another, it's 1 in 12. "Which is which?"
That was one of many advertisements in a recent campaign launched by the nonprofit California Healthcare Foundation in an effort to test ways of getting more consumers to ask critical quality questions about their hospital providers. In that way, providers themselves will know they are being compared and will be even more incentivized to improve their image in the public eye.
The organization is trying to draw more traffic to the foundation site, www.CalHospitalCompare.org, which rates care of 241 hospitals in the state (86% of the state's admissions) in seven categories. The hospitals voluntarily participate in the project.
That ad, and many others, was deemed a success, says Marybeth Shannon, director of the market and policy monitor program for CHF.
The campaign achieved an 11-fold increase in traffic after online and targeted e-mails were placed in the Bay Area between June and December of 2008. A similar campaign in Sacramento and San Diego between March and August of 2009 had similar success.
The campaign was launched because of a concern that patients don't know what questions to ask about quality and don't know these comparison tools are available, Shannon said. "This is the first attempt to spread what we've learned."
Nationally, "more than 200 examples of health quality rating programs are listed in the Health Care Report Card Compendium, assembled by the Association for Healthcare Research and Quality," according to "From Here to Maternity: Birth of an Online Marketing Campaign," a policy brief by Jane Sarasohn-Kahn of THINK-Health, who wrote about the online marketing campaign for the foundation.
However, "research shows that few consumers make use of them. In 2007, only 23% of Californians said they were aware of rating information on hospitals," Sarasohn-Kahn said.
Worse, only 1% actually used such information and changed their hospital choice as a result.
The foundation conducted the experiment to see if consumers could be re-educated to not just select a hospital on the basis of hearsay. The campaign targeted maternity care, one of the seven categories of care on CalHospitalCompare.org, because "it is among the most ‘shoppable' of health conditions" in an effort to get parents-to-be to know what questions to ask, Sarasohn-Kahn wrote.
"Women often have several choices of providers, as well as the time and motivation to do research beforehand. As maternity is not often a high-risk condition, personal preferences frequently play into decisions," she said.
On www.CalHospitalCompare.org, consumers can compare five hospitals simultaneously, and see how well they do in nine maternity measurements, such as the intensive care unit mortality rate, quality of respirator complication prevention efforts, and whether the hospital frequently performs vaginal birth after the mother has already had a Cesarean. Maternity patient experience is also ranked.
The site lists hospitals as superior, above average, average, below average or poor.
C-section information "can be useful for an expecting mother or couple," the site advises, adding, "If you want to do everything possible to have a vaginal delivery, you may prefer to use a hospital with a low C-section rate. You should discuss this concern with your obstetrician."
Another ad that turned out not to be as successful as the C-section one said, "Picking the color of your baby's room can be tough. But picking a hospital to give birth just got easier."
The campaign used newspaper Web sites, such as the San Francisco Chronicle's, the nonprofit voiceofsandiego.org, and branded e-mails, which turned out to be more expensive on a cost-per-click basis, than using Google or Yahoo search engines.
With Yahoo's Right Media, the campaign used blinded placement to achieve a cost-per-click-through rate of $1.14, versus $17.70 per click-through for other, more direct approaches.
Shannon says the results of the campaign testing were so promising, the foundation is about to launch a similar type of comparison effort for long-term care, and many other projects are in the planning stages.
Shannon says that the goal of www.CalHospitalCompare.org is not to direct patients to any one hospital, but only to give them some tips about aspects of care that are better or worse.
Launched in 2007, CalHospitalCompare.org is funded by about $2 million a year, 20% of which comes from participating hospitals and 80% from health plans. In addition to maternity care, the Web site also ranks care for heart attack, heart bypass surgery, heart failure, pneumonia, as well as other conditions and surgeries.
In the House healthcare bill is $23.5 billion that would allow Congress to continue pumping billions in new short-term aid to states to cover Medicaid costs that have increased with rising unemployment in the past year. Medicaid relief for states comprised one of the biggest pieces of February's $787 billion federal stimulus package, but that funding will run out next year, halfway through states' next round of spending plans. Under the Affordable Health Care for America Act, the federal government would continue to pay a higher share of all Medicaid costs—66% on average, up from 57% before the stimulus—for an additional six months.
A new study comparing 3,000 hospitals at various stages in the adoption of computerized health records has found little difference in the cost and quality of care. "The way electronic medical records are used now has not yet had a real impact on the quality or cost of healthcare," said Ashish K. Jha, MD, an assistant professor at the Harvard School of Public Health, who led the research project. The research is to be presented at a conference in Boston, and is a follow-on study to a survey of hospitals' adoption of electronic health records published this year.
Under the healthcare bill passed by the U.S. House, insurance policies largely geared to those without coverage would be offered on an exchange, or insurance marketplace, to help consumers purchase health plans, many using newly created federal subsidies. Legislation before the U.S. Senate would have exchanges regulated at the state level with insurance directors having a say in what policies are sold while monitoring health plan performance and quality, the Chicago Tribune reports. Analysts say proposed legislation should make the products offered more standardized, while giving regulators more say.
The U.S. Chamber of Commerce and an assortment of national business groups opposed to President Obama's healthcare reform effort are collecting money to finance an economic study that could be used to portray the legislation as a job killer and threat to the nation's economy, reports the Washington Post. An e-mail written by the Chamber's senior health policy manager proposes spending $50,000 to hire a "respected economist" to study the impact of healthcare legislation would have on jobs and the economy.
