Focusing on the marketing mix is fundamental, writes Karen Corrigan in her "Chief Marketing Officer" blog. The dilemma is that, historically, healthcare organizations have over-invested in the promotions end of the marketing mix at the expense of the other elements of the formula that create true customer value, she says.
Everyone knows about the highs (more insured) and lows (higher costs) in the Massachusetts reform program, but there are other states that have their own reform plans, albeit much smaller. To create a health reform plan that will insure more Americans, improve quality, and lower health costs, Congress and policymakers must learn from successes and failures in state health reform programs.
One program they can learn from is the Healthy Indiana Plan (HIP), which is a Medicaid expansion program that is operating under a federal waiver that allows the state to cover the uninsured who don't qualify for Medicaid. Unlike the Massachusetts plan, which features an individual mandate that requires nearly all residents to have health insurance, Indiana's plan focuses instead on getting coverage to a needy population that isn't eligible for Medicaid.
Massachusetts has experienced growing pains as the individual mandate has brought previously uninsured people, many of whom had put off care, into insurance. But demanding nearly all buy health insurance has also allowed insurers to balance the costs of the more expensive members with healthier individuals who are paying into the system but not using many services.
In Indiana, HIP covered more than 35,000 previously uninsured individuals by the end of its first year. Many of these folks delayed medical care and preventive services before signing up for HIP.
Milliman recently released a review of the program's first year, which shows the dangers of health reform programs. One problem is anti-selection. Anti-selection relates to the highest-risk, most expensive people seeking healthcare care as soon as they get coverage, which brings higher health costs initially. The good news is that after these sicker people get the care they need their health costs decrease over the year—and healthier individuals come aboard within a few months.
Anyone creating a health reform plan must understand that the first year (especially the first few months) will bring in people with the most serious medical problems and who will require the most expensive medical care, says Rob Damler, FSA, MAAA, principal and consulting actuary at Milliman in Indianapolis.
Milliman compared Indiana's HIP population against the typical commercial population and found much higher inpatient services, ER visits, and pharmacy costs. Milliman discovered the HIP population was more likely to have chronic diseases, such as asthma, depression, and diabetes, than the typical commercial population. The first people to enroll in the program in the first few months had a higher morbidity rate.
Milliman's research found that inpatient, outpatient, pharmacy, and physician expenditures peaked around the second and third months and then decreased over the year. This shows that the sickest, previously uninsured Hoosiers jumped at the new offering and received care immediately. Those in better health waited until later in the year to join.
Milliman found that inpatient use decreased in the seventh to ninth months of enrollment, outpatient costs dropped after the third month, and pharmacy costs increased steadily in the first nine months.
Damler warns that any health reform plan should take into account anti-selection. He also suggests that an individual mandate, which is in place in Massachusetts and has been debated as part of federal health reform, would have brought a "broader cross-section" to HIP from the start. He suggests that any health reform plan would be "difficult to protect against anti-selection in insurance without the use of some type of mandates."
Damler says an individual mandate coupled with personal responsibility and spending "appropriate levels" at the initial periods are keys to health reform's success.
Mandates have been debated by federal lawmakers, but there has not been broad support for requiring health insurance for all Americans.
However, as the Milliman study shows, if you are going to bring the healthy into the health insurance pool, policymakers will need to find ways to woo them into the water. Without demanding they buy coverage, don't expect the healthy (especially the young and healthy) to dip their toes into the health insurance waters.
Why should you go fully electronic when it comes to credentialing? For one, you could see as much as a 50% reduction in costs, says Matthew Haddad, president and CEO of Merversant.
My dentist and his hygienist entertained me at my appointment last week with a debate over the H1N1 virus and whether or not they'd be getting flu shots this year. The hygienist is opposed to flu shots in general. My dentist thinks that's stupid. (I'm summarizing, but that's the gist of it).
It's a debate that's raging in hospital settings, as well—nurses in particular are notoriously skeptical of flu shots and often refuse to get them. But this year, with the threat of H1N1 the stakes are much higher and hospitals are working hard to communicate to their internal audiences the importance of getting the shot.
In some cases, hospitals are taking a hard-line approach, mandating that all employees get the shot or get fired. That's the case in Albany, NY, where a new emergency regulation adopted by the State Hospital Review and Planning Council requires that all hospital workers get the flu vaccine—and that it be a requirement for employment, according to the (Albany) Times Union.
At Virginia Mason Medical Center in Seattle, the first U.S. hospital to require flu vaccination for staffers, employees who object must wear a face mask during flu season or possibly be fired, according to the Associated Press. Loyola University Medical Center near Chicago and Charleston Area Medical Center in West Virginia have also joined a handful of hospitals that have made seasonal flu shots mandatory for all workers. Some also plan to include swine flu, the AP reports.
But are there alternatives to the “do it or else" method—or at least complementary communications tactics that encourage employees to get vaccinated in a more positive way?
The 8-hospital Wellmont Health System, which serves Northeast Tennessee and Southwest Virginia, has found a way. In one of the best examples of employee engagement I've seen, they recruited dozens of employees to participate in a music video—set to the tune of Lynyrd Skynyrd's “Gimme Three Steps."
The message: “Help protect yourself—and our patients—from seasonal and H1N1 flu." (Seasonal flu shots are available for employees who come in direct contact with patients now, the organization says H1N1 vaccinations will begin soon.)
Head on over to the MarketShare blog to watch the video. I'd also love to hear what other hospitals, health systems, and clinics are doing to communicate the importance of getting a flu shot this year.
Note: You can sign up to receive HealthLeaders Media Marketing, a free weekly e-newsletter that will guide you through the complex and constantly-changing field of healthcare marketing.
Just in time for President Obama's speech before Congress on healthcare tonight, Sen. Max Baucus (D-MT), chairman of the Senate Finance Committee, released on Tuesday a "framework"—but not the actual bill—of the plans under consideration by his bipartisan six working group.
As expected, the public insurance plan is out, and the state co-op plans are in. As proposed under the framework, the co-op must be organized as a "nonprofit, member corporation under state law"; must not be "an existing organization that provides insurance as of July 16, 2009"; and must not be an affiliate or successor of any such organization.
A "high-cost insurance excise tax" is in. This excise tax of 35% would be levied on insurance companies and insurance administrators for health insurance plans above $8,000 for singles and $21,000 for family plans. This tax would apply to self insured plans and plans sold in the group market, but not to plans sold in the individual market.
Other highlights include:
Family and Individual Small business tax credits. Tax credits would be available for tax years 2011 and 2012 for firms with fewer than 25 employees and average wages below $40,000. Qualifying employers could receive the credit for up to two years, with a maximum credit of 35%.
Part D drug discount program. In order to have their drugs covered under Medicare, manufacturers beginning in 2010 must provide a 50% discount off the negotiated price for brand name drugs covered on plan formularies when beneficiaries enter the coverage gap.
Health insurance exchange. States would establish an exchange in 2010; so called mini medical plans with limited benefits and low annual caps would not be offered in the exchange.
Ombudsmen. States would be required in 2010 to establish an ombudsman office to act as a consumer advocate for those with private coverage in the individual and small group markets.
Transparency. Beginning in 2010, to ensure transparency and accountability, health plans would be required to report the proportion of premium dollars that are spent on items other than medical care. Also, hospitals would be required to list standard charges for all services and Medicare diagnosis-related groups.
High-risk pools. In 2010, the proposal would increase funding for state high-risk pools, so long as the funds are not used to replace current premium assessments and are not distributed to high-risk pools that have a waiting list.
Insurance Market Reforms Non group and small group markets. Beginning in 2013, health insurance plans in the individual market would be required to offer coverage on "a guaranteed issue basis" and would be prohibited from excluding coverage for pre existing health conditions. Limited benefit plans and lifetime limits now would be prohibited.
Interstate sale of insurance. Beginning in 2015, states could form “healthcare choice compacts" to allow for the purchase of non group health insurance across state lines. These compacts may exist between two or more states.
Benefit options. Four benefit categories with varying levels of coverage would be created. A separate policy would be available for young adults as well that provides a less expensive catastrophic coverage plan. All plans sold in the non group and small group market would be required to cover benefits, including preventative and primary care, physician services, outpatient services, emergency services, and hospitalization.
Shared Responsibility/Mandate Coverage Individual responsibility. Beginning in 2013, all American citizens and legal residents would be required to purchase health insurance or have health coverage from an employer, through a public program or through some other source that "meets the minimum creditable coverage standard." Exemptions are available related to religious objections or if coverage is deemed unaffordable.
Employer responsibility. Employers would not be required to offer health insurance coverage. However, employers with more than 50 full time employees (30 hours and above) that do not offer health coverage must pay a fee for each employee who receives the tax credit for health insurance through an exchange. This assessment would be based on the amount of the tax credit received by the employee(s), but would be capped at an amount equal to $400 multiplied by the total number of employees at the company.
Sutter Health, a 26-hospital system in Northern California, is on the hot seat amid accusations that it illegally extracted nearly $90 million from a Marin County hospital it now operates—but may soon compete against—as well as for questionable practices involving its relationships with three other hospitals.
Thirteen state legislators demanded in a recent letter that state Attorney General Jerry Brown "immediately investigate" nonprofit Sutter Health for "alleged misrepresentation of hospital finances, economic and medical redlining, abuse of nonprofit status, anti-trust violations, questionable allocations of public assets, and execution of contracts that may be in conflict."
"In almost every community in which Sutter Health operates, a legal and public battle over their broken promises and questionable actions ensues," they wrote.
Bill Gleeson, vice president of communications for Sutter Health, calls the accusations and suspicions "wild and completely false," specifically any innuendo that Sutter Health is trying to get out of taking care of the poor or that it is trying to make a profit at the expense of safety-net hospitals.
Gleeson says a check of state statistics would reveal that Sutter Health treats "more Medi-Cal patients in Northern California than any other healthcare organization and serves some of Northern California's most vulnerable populations . . . It's a misrepresentation of our record and anybody who spends any time looking at our history can see our outstanding record of service."
One of the most contentious accusations involves Sutter Health's lease management of Marin General Hospital, a 300-bed facility in affluent Marin County, which is north of San Francisco. Marin Health Care District spokesman Barry Blansett said that community leaders have long accused Sutter Health of letting the hospital deteriorate since the late-1990s, a time when it at one point almost lost Medicare and Medi-Cal reimbursement.
After several years of turbulence, Sutter Health agreed in 2006 to relinquish control of the hospital back to the Marin Healthcare District. But in 2007 and 2008, Sutter Health extracted $86.7 million in "excess cash," and transferred it to its network of 25 other hospitals, according to the lawmakers.
Chief among the lawmakers criticizing the large hospital system is Rep. Jared Huffman of San Rafael, who in an Aug. 11 letter, accused Sutter Health of taking an even larger sum of money—$120 million—$out of the hospital for use by Sutter Health affiliates since 1995, while transferring only $5.3 million in.
The transfers were made, Huffman says, after Marin Healthcare District, which owns the hospital, and Sutter came to an agreement in 2006 that Sutter Health would terminate its management of Marin General in June 2010. Sutter Health has managed the facility since 1995 when it inherited ownership through a hospital merger.
"I respectfully request that you explain the basis for allowing these large transfers of money out of MGH to other Sutter hospitals," Huffman wrote in a July 17 letter to the board that executes the hospital's operations. "I also ask that you assert your authority to stop any additional transfers of these ‘excess' funds until the situation has been fully investigated, and it is clear that such transfers are both lawful and in the best interests of MGH and its patients."
In response, Marin General Hospital's board of directors, members who were appointed by Sutter Health to approve transactions, responded in a letter signed by the board's chair, Robert Heller:
"Sutter Health will be returning to the district a debt-free, high-quality hospital whose value has been substantially increased, and will be doing so at a date well in advance of the original 2015 lease expiration, along with millions of dollars in cash accounts receivable and other assets, all in strict accordance" with the termination agreement.
"Until June 2010, MGH will continue to derive the benefits that being part of a large integrated system offers."
The letter continued, "Sutter Health operates much like a family that supports each other in good times and bad. In good times, affiliates share a portion of their revenue in excess of expenses in order to help strengthen the network. In times of need, affiliates can count on the network to help ensure that their services continue to be available to the local communities."
The legislators' letter asks Brown to determine whether Sutter Health "has a pattern of utilizing the assets and profits of county, district, and private safety-net hospitals to their own benefit and to the detriment of the surrounding community," says Sen. Ellen M. Corbett of San Leandro, one of the 13 lawmakers.
In her district, Sutter Health is accused of conflicts in a deal that could allow Sutter Health to assume ownership of a public hospital, without a vote of the people.
In a third contentious arrangement, Sutter Health is accused of brokering an exclusive contract with a large network of Bay Area doctors "in order to redirect wealthier patients away from St. Luke's" Hospital. "Sutter was required to subsidize St. Luke's operations while ensuring its continued independence. Sutter only agreed to fund retrofitting of St. Luke's when faced with a threatened medical redlining lawsuit by the City of San Francisco," the legislators charge.
And in a fourth controversy, Sutter Health is accused of trying to get out of a 20-year contract with Sonoma County in which it operates a county hospital in Sonoma County, and maintains charity and indigent care. "In 2006, Sutter attempted to breach the contract and close the hospital," according to the legislators' letter.
"After the supervisors threatened to sue for breach, Sutter agreed to maintain acute care, but has proposed shrinking services and transferring profitable services to a for-profit subsidiary that will not be subject to the contract with the county," they added.
"In each of the above examples, Sutter has owned or proposed building new boutique hospitals in close proximity to existing community hospitals. Sutter is building a new hospital in Alameda County, 43 miles from San Leandro Hospital. In Marin, Sutter Health recently purchased property 1.5 miles from Marin General Hospital, the county's safety-net facility, in order to develop a competitive facility for profitable business.
"In San Francisco, Sutter has proposed to shrink St. Luke's, which serves the medically-underserved southeast region of the city, to one-third its current size, while concentrating profitable specialty services at a new high-rise medical destination hospital in a more affluent part of town, and slashing Medicare and psychiatric services," they wrote.
Lawmakers' representatives say they do not know whether the attorney general will agree to review Sutter Health's business transactions, and their impacts on area hospitals and the communities they serve.
Medicare spent $1.8 billion in 2006 for hospice services for nursing home patients who did not meet requirements for that category of care, according to a new report from the Office of Inspector General.
In fact, 82% of hospice service claims for beneficiaries in nursing facilities did not meet at least one Medicare coverage requirement for that level of care. Such requirements include submittal of an "election statement," which is documentation that the beneficiary understands that hospice care is palliative rather than curative or documentation that the terminally ill beneficiary waives Medicare coverage of certain services, the report said.
"The extent to which hospices did not meet coverage requirements raises concerns about the services that Medicare is paying for and the quality of care that hospices are providing to beneficiaries during their last months of life," according to the 34-page report.
The review concluded, "CMS' current oversight procedures are inadequate" and "it must do more to ensure that hospices deliver care that meets Medicare requirements."
"Given the nature of hospices' noncompliance—which does not appear to be related to the beneficiaries' setting—these concerns extend to all Medicare beneficiaries receiving hospice care."
The OIG report found that 33% of claims were not accompanied by proper election statements, or that those statements contained "misleading language about the beneficiaries' right to revoke the election of hospice care," and return to standard Medicare care.
Also, 63% of claims did not meet plan of care requirements that include a properly detailed description of the scope and frequency of services, and did not specify intervals for review as required.
For 31% of claims, hospices provided fewer services than outlined in the beneficiaries' plans of care. For example, a common deficiency was that hospices provided services, but not as frequently as called for in the plans of care. "In the most extreme cases, there was no documentation in the medical records of any visits for a particular service."
For 4% of claims, certification that patients had a terminal illness was missing or did not meet one or more federal requirements. For example, in some cases, the certifications did not specify that the individuals' prognoses were for life expectancies of six months or less. "They were not supported by clinical information and other documentation in the medical records; or they were not signed by physicians."
The OIG report also discovered that not-for-profit hospices were significantly more likely to not comply with Medicare hospice claims requirements than for-profit hospices. "Specifically, 89 percent of claims from not-for-profit hospices did not meet Medicare requirements, compared to 74 percent of claims from for-profit hospices."
The OIG issued three recommendations:
CMS should educate hospices about the coverage requirements "and their importance in ensuring quality of care…Our findings raise questions about whether hospices…are furnishing needed services to beneficiaries at an especially vulnerable time in their lives."
CMS should provide tools and guidance to hospices to help them meet coverage requirements.
CMS should strengthen its monitoring practices regarding hospice claims, including conducting more frequent certification surveys of hospices as a way to enforce those requirements.
After more than a year of internal discussions, officials at Stevens Hospital in suburban Seattle have asked an independent consultant to open formal talks with several nearby healthcare systems in the hopes of creating an affiliation.
The consultant, Howard Thomas, has been told by the public hospital's board of commissioners to begin work immediately on defining the affiliation process and the specific proposed terms of affiliation for the 156-bed, 45-year-old facility in Edmonds, WA. Local media in the Seattle area are reporting that the hospital is already in confidential negotiations with five health systems.
Jack Kirkman, Stevens' vice president and chief development officer, says the commission has identified five goals for the affiliation:
Enhance and expand Steven's mission and vision by increasing and improving access to the healthcare services available to residents of South Snohomish and Northwest King counties
Enhance the availability of services and advanced medical procedures to the citizens in Stevens' service area and integrate this care with services that are available at Stevens
Improve Stevens' long-term financial viability
Improve the community's perception of Stevens and complete the process of developing Stevens as a "must have" healthcare provider
Retain and recruit quality medical staff by providing professional opportunities."
Built in 1964, Stevens' has a staff of more than 1,200 and more than 450 physicians have admitting privileges. Service lines include cardiac and cancer care, obstetrics, emergency services, and diagnostic imaging. The hospital serves the communities of North Seattle, Edmonds, Lynnwood, Mill Creek and Bothell.
Stevens Hospital officials say a replacement facility would cost about $400 million, which would have to be paid for by a local tax hike.
The HITECH Act was a long-time coming, especially because it holds business associates of covered entities accountable for compliance with the HIPAA Security Rule and the use of disclosure provisions of the privacy rule.
Security is only as strong as the weakest link, meaning while a covered entity may be secure, their business associate may not, effectively cancelling out the controls in place and reintroducing the risk of a breach of personal health information (PHI).
The compliance requirements will force both covered entities and business associates to evaluate the scope of connectivity and information shared (i.e., can these services be provided without sharing PHI). Both of these items will tighten the scope and security around PHI, reducing the risk of disclosure and breaches of patient privacy.
HealthLeaders Media recently caught up with Nutkis for a Q&A about HIPAA privacy and security. The following are some more highlights. The full Q&A can be found on the HCPro, Inc. HIPAA Update blog.
HealthLeaders Media: Business associates must now comply with HIPAA Security Rule and provisions about disclosures in the privacy rule per the HITECH Act. How do you see the industry—covered entities and business associates—handling this?
Nutkis: Internally, both covered entities and business associates should be defining or updating their programs for business partner compliance management. At a high level, HITRUST recommends organizations take the following steps:
Perform gap analysis of the current compliance process. The analysis should included internal policies, procedures, and contracts against a common checklist of requirements that include HIPAA, HITECH, and other applicable regulations.
Develop or revise a business partner compliance program. The gap analysis will provide management with a clear understanding of what is needed for the purposes of allocating dollars, resources, and time, and how to prioritize these activities.
Coordinate compliance with business partners. Once a program is in place or has been appropriately revised, it is time to start coordinating compliance with your partners, including customers, service providers, and peers. The value of compliance is limited if costs are high and timeframes are long; coordinating with others on a common approach and set of requirements will help contain these issues and reduce exposure.
Implement and maintain compliance. Revise contracts with business partners as they expire, include addendums, and ensure new contracts are up-to-par with the new program. Ensure compliance is maintained through notification of any violations. Organizations can minimize issues by maintaining a list of security contacts with each partner.
A significant issue is not just the business associate compliance, but the interpretation of the requirements by their healthcare customers. This is leading to business associates being asked to comply with hundreds of proprietary security questionnaires and requirements adding cost and complexity to the healthcare system.
HealthLeaders Media: Are business associates ready for this change?
Nutkis: HITRUST held a Business Partner Summit to begin to explore these issues and identify ways that industry can collaborate to clarify and streamline the process. A key take-away from the summit is that organizations are spending increasingly more on business partner compliance, while overall confidence in the effectiveness of these compliance efforts is actually decreasing. This is due to both the variety of requirements and wide range of business partners with different scopes, information security programs, and risk profiles.
Using our Common Security Framework (CSF) as the overarching framework of requirements and our certification, HITRUST is actively working to help organizations address this issue by defining a single, simplified business partner compliance process.
This includes setup, assessment, remediation, reporting, monitoring, alerting, and continued improvement. Our participants believe the HITRUST model will both reduce the risk exposure and contain costs for all stakeholders.
HealthLeaders Media: Did this change your client base already?
Nutkis: HITRUST has seen a significant increase in the number of organizations adopting the CSF to comply with business partner requirements, in both instances where their customer requires it or to promote in lieu of proprietary requests.
While the month of August clearly knocked the White House backwards on healthcare reform as Congressional town hall-style meetings exposed Americans' unease with an overhaul, the uproar does not seem to have greatly altered public opinion or substantially weakened Democrats' resolve on the issue. Critical players in the healthcare industry remain at the negotiating table, and despite tensions between some Democrats there is broad agreement within the party over most of what a package would look like.
