Nonprofit hospitals can breathe a sigh of relief that a healthcare overhaul proposed by Sen. Max Baucus doesn't include an excise-tax measure that had been contemplated just a few months ago for hospitals not offering enough charity care. For months, nonprofit hospitals have feared minimum charity-care requirements after a set of options released in May by the Baucus-led Senate Finance Committee suggested Congress would take the tax route.
Though building and maintaining a successful and thriving hospital in today's healthcare environment isn't easy, and challenges are numerous, cutthroat competition among providers isn't really one of them. But that's likely to change.
Sure, hospitals compete vigorously for high-margin patients and doctors who perform those high-margin services. But that's nothing compared to what appears to be coming with or without a legislative answer to healthcare reform.
Heart care and orthopedics are two examples that have historically been well-reimbursed, of course. But competition among hospitals as reimbursements decline for even these high-dollar service lines is destined to grow ever more fierce—not only because of the greater influence quality and outcomes data are exhibiting on where commercial and government payers steer their patients, but because over the medium- to long-term future, operating margins will be similarly squeezed. That means hospitals need to carve out niches on service lines that can effectively compete against sometimes-better financed and bigger rivals.
With these and other factors leading to greater competitive forces on the hospital landscape, senior leaders will have to make bold and often dramatic shifts in strategy. Here are three ways your hospital can survive and thrive in a market that seems destined to become more and more competitive over time.
1. If evidence doesn't support a service line, get rid of it.
Specific demonstration projects exist whose purpose is to cut down on the number of hospitals offering certain high-acuity services, based on the notion that fewer facilities and doctors performing greater quantity of those services improves patient outcomes. One of CMS' ambitious acute care episode demonstration projects includes Denver's Exempla St. Joseph Healthcare, which is one of four hospitals participating in the cardiovascular portion of the project.
It aims to demonstrate not only that hospitals that share risk and rewards with their physicians can reduce cost and waste, but that hospitals that do fewer of the procedures will wilt under the competitive pressure, and choose to close competing heart and orthopedic programs that perform fewer such procedures, and do them less well. Evidence suggests that hospitals and doctors who do many of this type of complicated procedures involved in heart care usually demonstrate better outcomes. If the program proves successful, and its attributes are rolled out nationwide, look for payers to gravitate to systems and hospitals that do more of the procedure in question—and do it better.
2. Treat your employees, from the broom-pusher to the cardiac surgeon, as partners who can help the business run better.
Even small hospitals deal with more complicated processes than a manufacturing plant that produces even the most complex products. Yet manufacturers have spent years and lots of research on finding ways to take the inefficiency and error out of these processes, while many hospitals haven't. There's waste in your processes, and the longer it goes on, the more inefficient—and less competitive—your hospital becomes. But it doesn't have to cost millions to take out that waste.
Who knows more about the kinks in your processes than the people who perform them? No one. That's why it's so important to find ways to engage these people to re-engineer processes that are wasteful. Rewards for rooting out inefficiencies can be effective. So can promises that any inefficiencies uncovered by anyone won't result in any job cuts.
3. Cost and quality are king. The sooner you act on it the better off you'll be.
The protective bubble of operating in a fee-for-service environment is ending, and you know it better than anyone. That means it's more important than ever to be a low-cost, high-quality supplier of healthcare services. Make sure you're able to demonstrate to payers why they're better off sending their patients to you for certain procedures that your hospital or system performs well. As time goes on, doing so positions you for better reimbursement in the future.
Having more payment at risk for quality outcomes is both an advantage and disadvantage. It may help you to decide that you're not competitive in a certain service and to discontinue offering it (see above). It may help you stand out and grow while the rest of your competitors eliminate that service. Regardless, you'll be in a better position as accountability receives greater influence on the number of dollars coming in your door.
By recognizing that more competition is coming to healthcare and acting to improve your organization's standing among your peers, you're ensuring the long-term success of your organization, your career, and the careers of others whom you care about in the hospital or system you lead.
Nearly one-third of children enrolled in the federal Children's Health Insurance Program (CHIP) receive no or very little care, while 72% of the program's spending is concentrated on 10% of children with chronic conditions.
This finding in yesterday's journal Health Affairs suggests that children who get no care may appear healthier than other enrollees, but "they are getting little preventive care, such as well-child visits and dental checkups.
"With so little contact with providers, these children are at increased risk of having health problems that go undiagnosed and untreated," they wrote.
Additionally, children in the zero spending group are disproportionately poor and African American.
The paper focuses on growing discussion in health reform about ways to "bend the curve" of cost growth in public programs, such as increasing cost sharing levels or introducing more high-deductible plans, reducing benefit or eligibility levels or adopting disease management programs.
But the researchers said that policymakers should be careful about raising share-of-costs or premiums for children. In 2008, the median spending level for children enrolled in Medicaid/CHIP for the full year was $226. "This suggests that setting premiums at 'nominal' levels, (say $20 per month per child) could deter some families from enrolling their children in public coverage.
"Indeed, past research indicates that higher public premiums are associated with lower take-up of public programs and higher disenrollment rates, particularly for children with fewer health problems."
Families whose children have no chronic health problems might not view public coverage as cost beneficial, even at fairly low premium levels, they wrote.
The paper was submitted by Genevieve M. Kenney, Joel Ruhter, and Thomas M. Selden. Kenney is a senior fellow at the Urban Institute. Ruhter is a graduate student at the University of Michigan, Ann Arbor. And Tom Selden is an economist with the Agency for Health Research and Quality.
Fifty-four percent of U.S. adults don't believe healthcare reform will pass this year, compared to 41% who do, according to a national telephone survey commissioned by the Deloitte Center for Health Solutions.
"Consumers are at a crossroads," says Paul Keckley, executive director of the Deloitte Center for Health Solutions. "While the majority of Americans surveyed (84%) believe some form of change is needed, many are confused by the complexity of the system and often default to their own personal experience with the system rather than look at the functionality of the entire system."
Harris Interactive conducted the national telephone survey of 1,010 adults 18 years old and older from Sept. 10-13 to gauge opinions about healthcare reform following President Barack Obama's address to the nation on Sept. 9. The survey has a sampling error of plus or minus 3.1%.
While most doubt legislation will pass, the 44% of those surveyed who watched Obama's address last week (55% did not watch) were inclined to agree (68%) versus disagree (30%) with Obama's reform plan.
"Interestingly, respondents said they trust physicians and healthcare providers (37%) the most when it comes to reforming the healthcare system, followed by the White House (21%), Congress (13%), employers (11%), and health insurance companies (7%)," Keckley says.
Concern over the government running healthcare was a common theme throughout the survey results. Sixty-one percent of respondents believe that Congress is likely to make the healthcare situation worse than better, and 55% thought government solutions to healthcare will ultimately cost more and deliver less compared to private sector solutions. Additionally, while the economy is still a major concern, 51% believe that health reform should not wait until the economy is better compared to 47% who thought it should wait.
Top concerns expressed by consumers surveyed include:
37% do not want the government to run healthcare
20% do not want their taxes to increase to cover healthcare for others
13% were concerned that they did not understand the proposals
12% thought they might have to wait too long to see a doctor if the public option is passed
5% were concerned about issues related to end-of-life care
"Our survey results indicate that while the majority believe the healthcare system needs to change, 48% want improvements, but not a major overhaul of the system. This supports the idea that a more moderate, incremental approach may be the answer," Keckley says.
Additional findings from the survey include:
73% of respondents believe it is important for every American to have health insurance
Uninsured (60%) and underinsured (55%) respondents were more likely to believe a major overhaul of the U.S. healthcare system is needed
57% of respondents believe Town Hall meetings have been an effective forum for gaining feedback from the public compared to 35% who disagree with that statement
Respondents were split when it came to ranking the U.S. healthcare system, with 48% agreeing that the U.S. healthcare system is the best system in the world compared to 48% who disagreed
55% of respondents do not believe coverage for the uninsured should be the sole focus of the debate
Respondents were most familiar with terms such as the public option (46%), healthcare co-ops (34%), and health insurance exchanges (28%), compared with terms such as comparative effectiveness research (20%) and the medical home (19%)
A Hollywood, FL, family won a $14 million medical-malpractice verdict against a doctor who accidentally punctured the man's artery during surgery following his stroke, leaving the man paralyzed and bedridden. Though it awarded the family $14 million, the jury found no negligence by the surgeon in the case.
Rural health advocates are hoping national reform will fix the rural physician shortage that is plaguing parts of the country. The major goal of reform is to add some 47 million uninsured Americans to the ranks of the insured, but there are still concerns about whether those newly insured would have access to healthcare.
Senate Finance Committee Chairman Max Baucus said he expects to make adjustments to his healthcare plan, in a bid to solidify support for the bill after some Democrats said it would impose big costs on middle-income families. Baucus' maneuvering came a day after he unveiled his long-awaited bill, designed to expand insurance coverage to tens of millions of Americans not now covered. The bill includes a requirement that most Americans carry health insurance or pay a fine, and creates a new tax on high-dollar health plans.
The Labor Department said it is seeking an exemption for General Motors' new retiree healthcare plan that would carry out the automaker's plans to transfer company securities into the healthcare trust. The United Auto Workers' retiree healthcare trust fund received a 17.5% ownership stake in the new GM as part of the company's government-led efforts to emerge from bankruptcy protection last summer. The healthcare trust, which begins Dec. 31, will cover 700,000 GM retirees and dependents.
His fellow Democrats shuddered and Republicans sneered when Sen. Max Baucus unveiled legislation to remake the healthcare system. Now, the chairman of the Senate Finance Committee gamely insists that it can pass the Senate, core provisions intact. That's precisely what many Democrats are hoping to avoid, and not even an attempt to choreograph a display of unity after a closed-door meeting could obscure it.
The United States plans to donate 10% of its supply of pandemic H1N1 influenza vaccine to the World Health Organization for use in low-income countries. The nation has on order 195 million doses of the swine flu vaccine, which is due to start arriving early next month. The White House said it "is taking this action in concert" with eight other countries.
