Should a 97-year-old man undergo an expensive, dangerous open-heart operation to repair a lethal tear in a main artery of his heart? No, concluded the patient, Michael DeBakey, the world-famous cardiovascular surgeon who pioneered the operation. DeBakey's dilemma has become increasingly ordinary. Age is no longer the deciding factor, even for invasive treatment such as open-heart surgery. A more basic question is whether this never-too-old approach is an example of U.S. medical progress, or an example of why Medicare is headed for insolvency.
Desperate to find ways to pay for a healthcare overhaul that could cost more than $1 trillion over the next decade, Congress has begun to look at limiting the tax exclusion on employer-sponsored health benefits, which cost the federal government an estimated $225 billion in foregone tax revenue in 2008. Ending the tax break entirely is out of the question politically, but the Senate Finance Committee is likely to propose limiting it in some fashion—by requiring people with the most expensive insurance, or the highest incomes, or both, to pay some taxes on their health benefits.
Tens of thousands of Massachusetts patients who grapple with some of the most intractable mental health problems should face fewer barriers to treatment under a state law that went into effect July 1. But the cost of the state's latest healthcare expansion remains an open question. The expansion also illustrates two of the most pressing issues in healthcare today: equality for mental health services and the price tag for expanding medical care.
Across the country, activist groups on each side of the healthcare debate stepped up their campaigning while members of Congress were home for the Fourth of July recess. In Maine, there are moderate Republicans who could provide crucial support for the Democratic healthcare plan expected to emerge in the coming weeks, and efforts to sway their votes were intense.
Outpatient facilities and pharmacies hoping to see an increase in reimbursement for separately payable drugs in CMS' 2010 OPPS proposed rule didn't get their wish, but they did see additional proposed guidance on physician supervision rules.
CMS also proposes to allow hospitals to bill Medicare for pulmonary and intensive cardiac rehabilitation services.
"My sense when I first looked at the proposed rule this year was that it seemed much shorter," says Jugna Shah, MPH, president of Nimitt Consulting in Washington, DC. One reason for that, Shah says, might be because CMS chose not to add any additional composite APCs or additional outpatient quality indicators.
That doesn't mean CMS is abandoning its commitment to "value-based" purchasing principles, Shah says, but it does seem like CMS is taking some time to assess the impact of its current composite APCs before adding additional ones.
Reimbursement for separately payable drugs
Providers and various stakeholders have repeatedly weighed in to CMS over the past four years that charge compression has a huge negative impact on how it computes payment rates for separately payable drugs. CMS acknowledges this as an issue, and in its discussion on how it calculated payment rates for 2010, CMS referred to the pharmacy stakeholders' proposal.
Although CMS analyzed the pharmacy stakeholders' proposal, the agency elected not to use that methodology nor did it follow the APC Advisory Panel's recommendations. Instead, CMS introduced a new calculation method: the result is that CMS' proposed payment for 2010 for all separately payable drugs of average sales price (ASP) plus 4% came as a total surprise, says Shah.
"The fact that the 2010 proposed payment rates for separately payable drugs remains the same as what we have today, despite the CMS' new calculation methodology, is truly disheartening," says Shah.
CMS' new methodology does shift some packaged drug costs to separately payable drugs, but falls quite short of covering what providers would consider their drug acquisition costs and pharmacy overhead/handling costs, says Shah.
Shah cautions that an in-depth reading of the information is required to analyze how CMS arrived at the payment rate.
"To the end user–hospitals paid under OPPS–if the proposed payment rate of ASP plus 4% is made final for 2010, then nothing will look different," Shah says. She is hopeful that hospitals will weigh in on this and other CMS proposed changes.
"CMS' proposal is far from what providers have been telling CMS they need for separately payable drug reimbursement to cover both acquisition and pharmacy overhead/handling costs," Shah says.
Some estimates provided to CMS indicate that adequate coverage of drug acquisition costs and pharmacy overhead would result in CMS paying closer to ASP plus 13% for separately payable drugs, Shah says. Alternatively, CMS could reimburse hospitals at ASP plus 6% and provide a separate add-on payment for pharmacy handling/overhead costs similar to what the pharmacy stakeholders group proposed and APC Advisory Panel supported.
"Unfortunately, CMS' proposal for 2010 is far from what providers have been telling CMS they need for separately payable drug reimbursement to cover both acquisition and pharmacy overhead/handling costs," Shah says.
Physician supervision
CMS proposes to allow physician assistants, nurse practitioners, clinical nurse specialists, certified nurse midwives, and clinical psychologists to provide supervision of hospital outpatient therapeutic services when their license allows them to do so.
"The fact that they are going to be able to do the supervision is a huge benefit to hospitals," says Kimberly Anderwood Hoy, Esq., CPC, director of Medicare and compliance at HCPro, Inc., in Marblehead, MA. Under last year's clarification, hospitals were not be able to bill for services supervised by a nurse practitioner unless a physician was present.
"This really expands the number of people who can provide supervision, and that is really important in rural areas," Hoy says.
However, Hoy cautions that the change, if finalized, would not go into effect until 2010, so hospitals must still follow the current rules for 2009.
"The fact that we see so much discussion in the 2010 OPPS proposed rule on this topic is a testament to providers and other industry organizations for raising tough questions with CMS on its physician supervision and incident-to language over the past 12-16 months," says Shah.
Additional proposed changes
CMS proposes to evaluate surgically implantable biologicals that are not receiving pass-through payment before January 1, 2010, for pass-through status using the device category pass-through process. CMS has also proposed to increase the separately payable drug packaging threshold to $65 (it is currently $60) and to package 5HT3 antiemetics.
CMS is also considering paying rural providers for kidney disease education services furnished on or after January 1, 2010, to Medicare beneficiaries diagnosed with Stage IV chronic kidney disease.
CMS will accept comments on the proposed rule until August 31, and will respond to comments in a final rule to be issued by November 1.
Healthy San Francisco, held up as a model employer "pay or play" strategy, is two years old today—and its supporters view the program as a possible solution to the nation's 47 million uninsured.
The program has added 43,000 of 60,000 targeted San Franciscans to its rolls since it began and has been adding about 1,800 people per month.
The earliest participants in the program appear to have reduced their need for the most expensive kinds of healthcare, such as emergency room care. For example, the number of hospital admissions declined from 28.2 per 1,000 participants to 18.4 and the number of hospital days declined from 103 to 61 per 1,000 participants.
"San Francisco's Health Care Security Ordinance has a number of features that should serve as a model for a national policy," says Ken Jacobs, chairman of the Labor Center at the University of California at Berkeley and co-author of the report, "How to Structure a 'Play-or-Pay' Requirement on Employers: Lessons from California for National Health Reform."
But it is not yet clear about the financial portion of the program, and there are two other questions too:
Can the program's timely access to care and prevention improve patient outcomes over the long term?
Can members avoid enough expensive care to produce a net savings?
Also unclear is how much support will continue to come from employers, especially those dependent on tourism, if the economy continues to slide. Some businesses fear that scheduled 2010 increases in the amount they will have to pay for each employee hour will provoke some companies to move out of town.
Jacobs, who has studied the city's program, says so far the program is operating well. "Employers have adapted to the SF ordinance relatively easily," he says. "The earliest evidence is that employers are by and large keeping the coverage they have for those workers who were already covered on the job, and paying into the city for those jobs that did not previously provide coverage."
Healthy San Francisco, a program run by the city, provides primary, mental health, and acute care as well as substance abuse treatment for adults under age 65 who have been uninsured for the most recent 90 days, regardless of immigration status. It does not pay for dental or vision care and it is not an insurance program. And all care is provided through "medical homes" in a network of 30 community clinics throughout the city plus Kaiser Permanente as of July 1.
In a nutshell, here's how the program works:
Employers with at least 20 employees must either "pay" the city based on the number of hours their employees work, or "play," which means finance employee health plan coverage at a similar value for their employees. If the employer chooses to pay, but employees do not qualify for Healthy San Francisco, the funds are deposited into a "Medical Reimbursement Account" that the employee can use for out-of-pocket health are expenses.
The city's Health Care Security Ordinance of 2006 established the employer mandate that took effect on Jan. 9, 2008 for large employers, and April 1, 2008, for medium-sized employers, six or nine months after the start of Healthy San Francisco. Employers with 20 or more full or part-time employees must spend $1.23 per worker hour Employers with 100 or more employees must spend $1.85 per hour; those rates will go up to $1.31 and $1.96 next year.
As of December 14, 2008, more than 850 employers covering nearly 33,000 employees had elected to use the city option, contributing $37.3 million to the city, roughly half to Healthy San Francisco and half to the Medical Reimbursement Account.
But it is too early to know whether all the employers who are required to pay or play are actually doing so.
Applicable employers had until just two months ago, April 30, 2009, to file a "mandatory annual reporting form," indicating precisely how they complied, and whether they had "paid" into the city's Healthy San Francisco plan, or "played," by spending at least that amount on an employee health plan.
Two months after that deadline, employers returned 5,000 of those forms to the city, says Joannie C. Chang, contract compliance officer with the city's Office of Labor Standards Enforcement. However, some of the employers were apparently confused and did not fill out the forms correctly, requiring the city to make follow-up calls to verify the accuracy of the data they submitted.
Chang says that "overall, I believe there's been good rates of compliance," adding that the city has conducted 70 presentations to employers, human resources consultants as well as mailings, "so most employers are aware of their obligations."
For those employers found to be out of compliance, she says, "the biggest challenge is making sure they understand the legal requirements, but once they do, they comply."
Chang says the city has 187 open investigations, about half initiated by employees who realized they were not receiving benefits, and the other half involving employers who recently learned about the law and sought assistance from our office to come into compliance.
"Given the city's budget and our limited staffing at this time, we definitely have our work cut out for us," Chang says.
Restaurant group suit
Another looming issue is the staunch objections to the ordinance now being litigated by the Golden Gate Restaurant Association. A three-judge panel with the Ninth Circuit Court of Appeals ruled in favor of San Francisco last September, but the association has appealed that decision to the U.S. Supreme Court.
The association, which represents 800 restaurants in the city limits, including some of the city's largest, supported the original legislation that created Healthy San Francisco, but takes issue with the employer mandate saying it is way to excessive.
Kevin Westlye, the association's executive director, says that already many restaurants are having to limit their hours or days of operation and letting go paid staff not just because of the economic downturn, but because of the expense of this ordinance.
One way to look at it, Westlye explains, is that an employer with 100 workers, half full-time and half part-time, would be spending $100,000 on health insurance plans for their employees before the ordinance. Today, he says, "that same restaurant is spending $250,000. And that's on a payroll of $2 million. We just don't think this is affordable."
For many of the younger workers in the food service industry, he says, a Kaiser plan can be purchased for $250 with dental and vision. Under the city's ordinance, businesses and their employees are spending a total of $450.
Westlye says until the case is heard or rejected, restaurants will continue to uphold the law, but he worries that some restaurants may leave the city or be forced to reduce their quality.
City officials are cautious despite early successes
Outlined in that March 17 report are some apparent successes. The average number of health visits went down between the first year and the first six months of the second year on an annualized basis. So did the number of surgeries, need for radiology, average number of prescriptions filled, hospital admissions, number of hospitalization days, and average lengths of stay. Emergency department visits also declined. Visits for urgent, mental health, and substance abuse treatment reduced as well.
City officials are cautious, however.
"Any changes in utilization or costs that are observed are most likely due to how participants were enrolled in the program (in this case, at the point of service)," the program's administrators said in the March 17 report. "Changes in health seeking behavior (emergency department utilization) due to system changes take time, perhaps two to three years to observe."
While most of the enrollees are the neediest, earning below 100% of the federal poverty level, the maximum annual earning for eligibility has been expanded over the two years, from 100% of the federal poverty level, to 300% and now 500%.
One of the early fears was that so many patients who had long deferred healthcare would suddenly become eligible and swarm the clinics. So far that hasn't happened, says Tangerine Brigham, director of San Francisco's Health Access Program. Of the 30 clinics, only five are no longer accepting new patients.
Other clinics have been expanded, and wait times have been dramatically reduced, she says.
Another stumbling block that has proved challenging is the requirement that patients renew their standing as participants each year, something many have neglected to do, Brigham said. "We're implementing a number of strategies to get people to renew their eligibility on time so there's no break in their coverage," she said.
As far as whether the San Francisco plan can be adopted nationally, one concern is that employers will cut workers' hours to part-time to avoid having to pay health insurance costs. San Francisco's plan, however, requires employers to pay a rate for all employees, part-time or full-time.
"This is a real strength in avoiding any perverse incentives for firms to lower hours of work to avoid the requirement," said Jacobs. "Not having such a requirement was a notable flaw in the original Senate Finance Committee options paper. The House bill prorates the requirement for part-time workers."
Medical staffs today consist of a blend of four generations, including the so-called World War II Silent Generation (1925-1942), Baby Boomers (1943-1961), Generation X (1962-1981), and Generation Y (1982-1998).
Each generation brings with it a different work ethic, mode of communication, and definitions of professionalism and loyalty. If you're unaware of these generational differences or don't accept that they are sitting on your doorstep, they could stymie your recruitment efforts.
These differences include learning style, teaching style, approach to clinical schedules, and the concept of life-work balance, academic and personal motivation, desire for control of their work experience, effective productivity incentives, and communication style, according to "The impact of new-generation physicians on the function of academic anesthesiology departments," which appeared in the December 2007 issue of Current Opinion in Anesthesiology.
The first thing you need to know about generational—and therefore cultural—differences between older and younger physicians is that you can't change them.
"If you attempt to change someone else's culture, you are going to be in for a long fight," says Phillip Kibort, MD, MBA, vice president of medical affairs and chief medical officer at Children's Hospitals and Clinics of Minnesota in Minneapolis and St. Paul. "The best leaders are the ones who work with these differences as opposed to trying to change them."
The second thing you need to know is that Generation X and Generation Y are changing the definition of professionalism and loyalty. The Silent Generation and Baby Boomers generally considered medicine a calling and dedicated their lives to their practices. Gen Xers and Gen Yers, however, probably regard medicine as a career or job—they want to work from 8-5, have time off to help starving families in Nicaragua, and play an active role in their families.
"We now have two very discrepant ideas of what a professional is—and they are both right," says Tracy Sanson, MD, FACEP, associate professor at the University of South Florida in Tampa.
Gen Xers and Gen Yers also grew up in the age of Sam's Club and eBay, and they're loyal to a brand as long as that brand delivers on their ever-increasing expectations. If a brand fails to satisfy, they go looking for a better deal, and that goes for jobs too.
And this is probably a good thing. Gen X and Gen Y have forced the medical community to introduce creative recruitment and retention strategies, such as paternity leave, flex time, and part-time schedules, which Sanson says is desperately needed to attract future generations of physicians. This flexibility is also good for older generations, who are faced with the challenge of caring for ailing parents.
The new definitions Gen Xers and Gen Yers bring to professionalism and loyalty have thrown older physicians for a loop. Twenty years ago, medical staff leaders had the luxury of mulling over recruiting decisions for weeks, or even months. "Now, if you are not texting them as they are getting in their car after an interview, they think you are not interested in them and they move on," says Sanson.
To leverage the strengths that all four generations bring to the workplace, Sanson suggests developing a mentoring program that pairs members of the Silent Generation and Baby Boomers with Gen Xers and Gen Yers. "The Xers and Yers forget that the Silent Generation and Baby Boomers have institutional knowledge and a wealth of experience, so we need to tap into that." At the same time, Gen Xers and Gen Yers bring the "why does it need to be done that way?" mentality to the table, which forces institutions to evolve.
Keep in mind that these mentoring relationships should not be created with the idea of one person denigrating the other for what he or she doesn't know. It's not about the younger physicians saying, "Here, let me teach you how to use e-mail," says Sanson.
If getting physicians onto the medical staff (and keeping them there) isn't hard enough, finding younger physicians who are interested in becoming medical staff leaders certainly is.
To help fulfill that need, Children's Hospitals and Clinics of Minnesota has developed a program that invites young physicians with leadership potential to undergo two years of leadership training at a local university. "There is still a high percentage who aren't interested, but we get a good return on investment for the ones we do work with," says Phillip Kibort, MD, MBA, vice president of medical affairs and chief medical officer at Children's. "We hope those people will participate more in the hospital."
The study mentioned above concluded that "academic departments of anesthesiology, which can successfully incorporate the changes and most importantly the functional and organizational flexibility needed to respond to the newer generations' worldview and so-called balanced goals will be able to best attract high-caliber house staff and future faculty." Well said.
The nation's hospital payrolls grew by 3,700 new jobs in June, and the healthcare sector was one of the few job growth areas in the economy in the first half of 2009, Bureau of Labor Statistics preliminary data released today show.
While hospitals are reporting payroll increases, the growth is well off the pace set in recent years, when the hospital sector added 6,800 jobs in June 2008, and 13,400 jobs in June 2007, BLS data show.
"I see nothing in these numbers to suggest that the slow down in employment growth is turning around in hospitals or healthcare, or anything that would indicate that people might be feeling more optimistic about the back half of the year," says David Bachman, a senior analyst with Cleveland-based Longbow Research LLC. "My sense is that the belt tightening continues here and hospital administrators and human resources managers are expecting that the back half of this year will be as tough, or tougher, than last year."
Overall, the healthcare sector—from physicians' offices, to residential mental health homes, to blood and organ banks—reported 20,800 payroll additions in June, and 127,300 new jobs in the first half of 2009, BLS preliminary data show. In the first half of 2008, the healthcare sector grew 179,400 new jobs, and averaged about 30,000 new jobs per month.
The fastest area of job growth in the healthcare sector continues to be in the ambulatory healthcare services, which reported 12,400 new jobs in June, and 83,700 new jobs in the first half of 2009, BLS preliminary data show.
"That is a continuation of this longer-term trend we've seen toward more healthcare being delivered in the outpatient setting, away from the traditional inpatient hospital setting," Bachman says. "That is going to continue for a number of years to come. There is sill a long runway for that to play out."
In the first half of 2009, the nation's hospitals reported 19,400 payroll additions, preliminary data show, compared with 67,400 payroll additions in the first six months of 2008, and 37,000 additions for the same period in 2007. BLS reports that there were more than 4.7 million hospital payroll jobs at the end of June, 2009.
If hospital payroll increases continue at this pace, fewer than 40,000 new jobs will be created in 2009, as compared with 137,100 new hospital jobs in 2008; 105,700 new jobs in 2007; and 81,400 new jobs in 2006, BLS data show.
Bachman says BLS figures for the healthcare and social assistance sector show that there were 726,000 job openings in April 2008, compared with 514,000 job openings in April 2009, the latest figures available. "The need for fewer new jobs than we had a year ago comes as patient censuses at hospitals continue to be soft," Bachman says. "Importantly, existing staff are not leaving positions and are probably willing to pick up extra shifts, so we are getting more productivity from existing workforce."
BLS Press Officer Gary Steinberg stressed that the figures released today are preliminary and subject to change. In May, for example, preliminary BLS preliminary data showed only 300 new hospital jobs nationwide. As more data arrived, however, BLS revised its figures and reported that 2,700 new jobs were created in May.
"Keep in mind we can only publish what we've got. If employers send us data late, we are going to publish it as long as we have every reason to think it is accurate," Steinberg says. "With hospitals, we are talking about 4.7 million payroll jobs. If an employer sends us more data and it's a couple thousand one way or the other because the universe is 4.7 million, for us it's not a big deal. But it makes sense that it would be a big deal for your readers."
Even with the slowing payroll additions, the hospital and healthcare sectors are still outperforming the overall economy. BLS preliminary data show that nonfarm payroll employment fell by 467,000 as the nation's unemployment rate remained at 9.5%. Since the start of the recession in December 2007, payroll employment has dropped by 6.5 million jobs and the unemployment rate has risen by 4.6%, BLS data show.
Many primary care physicians practicing under contract with Blue Cross Blue Shield of Massachusetts received a total of $27 million as a reward for meeting certain cost and quality goals in an annual incentive program that was among the first of its kind in the country when it began in 2000, the health plan said this week.
For all eight years of the award payouts, physicians have received a total of $164 million under the project, which is called the Primary Care Physician Incentive Program. The latest round covered achievements in 2007.
The recent payout, which was awarded to an undisclosed number of doctors, was a reward for high rates of ordering mammographies for their patients, appropriate management of diabetes and lipid levels, and for reporting outcomes from treatment of various chronic conditions.
Physicians who were more likely to receive the additional payment included those who routinely ordered body mass index tests for children, prescribed certain generic drugs instead of brand-named, and appropriately utilized laboratory testing services.
"The PCP Incentive Program is consistent with our work to transform the healthcare system to address the underuse, overuse, and misuse of healthcare services to award for the quality and outcome of care and of care our members receive," said John Fallon, MD, chief physician executive at BCBSMA.
BCBSM spokeswoman, Jenna McPhee, emphasized that, "Choosing which drug to prescribe is always at the discretion of the physician, and the targets for this measure were set to allow physicians to choose name-brands when they feel necessary."
The establishment of electronic medical record systems in doctors' practices also helped them achieve a qualifying score, as did completion of cultural competency training, said BCBSM.
Each year, the health plan releases a list of the incentives, and gives physicians a review after six months to illustrate how far they may be from their goals.
Blue Cross Blue Shield of Massachusetts representatives said that by giving doctors such incentives to incorporate these practices into their treatment settings, they have increased Healthcare Effectiveness Data and Information Set scores, a well-recognized way in which health plans and others measure the effectiveness of types of care.
Overall, adult obesity rates increased in 23 states, but did not decrease in any state this past year. At the same time, the rate of obese and overweight children is at or above 30% percent in 30 states, notes the report released by the Trust for America's Health and the Robert Wood Johnson Foundation.
For the fifth year in a row, Mississippi had the highest rate of adult obesity at 32.5%. However, four states were not far behind with rates above 30 percent: West Virginia (31.2%), Alabama (31.1%), and Tennessee (30.2%). Overall, eight of the 10 states with the highest percentage of obese adults are in the South.
On the flip side, the states with the least adult obesity were in the Northeast or West: Colorado led the list with the lowest percentage of obese adults at 18.9%, followed by Massachusetts (21.2%), Connecticut (21.3%), Rhode Island (21.7%), and Hawaii (21.9%).
“Our healthcare costs have grown along with our waist lines, said Jeff Levi, PhD, TFAH's executive director, in a statement. "The obesity epidemic is a big contributor to the skyrocketing healthcare costs in the United States. How are we going to compete with the rest of the world if our economy and workforce are weighed down by bad health?"
Overall, adult obesity rates now exceed 25% in 31 states and exceed 20% in 49 states and Washington, D.C. Two thirds of American adults are either obese or overweight. In 1991, no state had an obesity rate above 20%.
The news is equally bleak for children as childhood obesity rates have more than tripling since 1980. Again, Mississippi had the highest rate of obese and overweight children (ages 10 to 17) at 44.4%. Eight of the 10 states with the highest rates of obese and overweight children are in the South.
The states with the lowest rates of obesity among children tended to be in the Midwest and West. They were: Minnesota and Utah had the lowest rate at 23.1%, followed by Oregon (24.3%), Montana (25.6%), and North Dakota, Connecticut, and Wyoming (tied at 25.7%).
In addition to the rankings of states by obesity rates, the report also found that:
The current economic crisis could exacerbate the obesity epidemic because food prices are expected to rise. This would make it more difficult for families to eat healthy foods.
Nineteen states currently have nutritional standards for school lunches, breakfasts, and snacks that are stricter than current federal requirements. Five years ago, only four states had legislation requiring stricter standards.
Twenty states have passed requirements for body mass index (BMI) screenings of children and adolescents or they have passed legislation requiring other forms of weight assessments in schools. Five years ago, only four states had passed screening requirements.
A recent analysis commissioned by TFAH found that the Baby Boomer generation has a higher rate of obesity compared with previous generations; this means that as the Baby Boomer generation ages, obesity related costs to Medicare and Medicaid are likely to grow because of the large number of people in this population group.
The report also proposed that obesity issues need to be addressed within healthcare reform by:
Ensuring every adult and child has access to coverage for preventive medical services, including nutrition and obesity counseling and screening for obesity related diseases, such as type 2 diabetes.
Increasing the number of programs available in communities, schools, and childcare settings that help make nutritious foods more affordable and accessible, and providing safe and healthy places for people to engage in physical activity;
Reducing Medicare expenditures by promoting proven programs that improve nutrition and increase physical activity among adults ages 55 to 64.
The report also calls for a national strategy to combat obesity that includes defining roles and responsibilities for federal, state, and local governments, and encouraging collaboration among businesses, communities, schools, and families to promote healthier lifestyles.
