President Obama's plan to rein in federal spending on healthcare could end up shifting costs to the private sector, economists say. And unless doctors and hospitals are able to respond to the government cuts by becoming more efficient, the result could be higher costs for insurers, employers, and people with private medical coverage.
The financially strapped, Massachusetts-based Caritas Christi Health Care hospital system is negotiating to buy the Landmark Medical Center, a 214-bed community hospital in Woonsocket, RI, that has been in court-appointed receivership for a year. Massachusetts and Rhode Island regulators say they will take a hard look at the potential merger. Caritas Christi's board has authorized its management to move forward with negotiations, according to three healthcare industry professionals. Officials at Caritas Christi and Landmark declined to confirm that a deal is close.
In an effort to avoid stonewalling President Barack Obama's healthcare plan, the American Medical Association voted to support new "alternatives" to reforming the healthcare system, including those funded by the federal government. Although the AMA's policymaking body stripped the words "public option" from an earlier resolution, doctors endorsed a plan to cover the uninsured by supporting "health system reform alternatives."
Minnesota-based Mayo Clinic has announced that it plans an outpost at the Mall of America as the mall expands into a second phase. Mayo officials said they haven't decided what services the site will offer, but said they could include diagnostic screenings, wellness counseling and other services that might direct patients to the home campus in Rochester. At a news conference, Mayo executives said they plan to spend the next 12 months deciding the nature of the facility and the size of their investment.
Employers who offer health insurance coverage could see a 9% cost increase next year, and their workers may face an even bigger hit, according to a report from consulting firm PricewaterhouseCoopers.
Costs will rise in part because workers worried about losing their jobs are using their healthcare more while they still have it, the firm said in the report. The report also said rising unemployment is driving up medical costs.
It appears that all systems may be slow this week—and maybe this month—in pushing healthcare legislation through congressional committees.
Initially, a draft bill was expected from the Senate Finance Committee by yesterday. However, shadowed by questions over costs raised this week by the Congressional Budget Office and the finer points of the legislation, the Finance Committee has postponed marking up legislation until after the July 4 recess.
CBO had estimated on Tuesday that the costs of reform legislation may be closer to $1.6 trillion; panel chairman, Sen. Max Baucus (D-MT), is pushing for the final price tag to be around $1 trillion.
Yesterday, the Senate Health, Education, Labor and Pensions Committee, which is also working on healthcare legislation, began its long review of amendments--with a less than bipartisan spirit. The goal was that the committee would finish its work and approve a bill by June 26. However, it may take longer than that—if yesterday is any indication.
Republicans seemed to be stepping up their resistance to the bill—criticizing Democrats for providing adequate time for reviewing the proposals related to creating insurance programs and restructuring the way providers are paid. "I hope we don't become victims of a deadline," said Sen. Michael B. Enzi (R-WY), the ranking minority member on the panel.
Sen. Orrin Hatch (R-UT) said it appeared that the committee was beginning a "partisan exercise on perhaps the most important legislation of our lives."
With the RAC demonstration ended, one of the best ways to prepare for a RAC audit comes in learning from survivors. Elizabeth Lamkin, CEO of Hilton Head Regional Hospital in South Carolina, offered key guidance to HFMA conference attendees in how to ready their organizations for a RAC attack. As you can imagine, the discussion was lively and overtaken by questions from the audience, who were eagerly ingesting as much information as possible.
As part of the RAC demonstration, Hilton Head Regional, a Tenet Healthcare hospital, was indeed audited and went through an appeals process, which Lamkin says, was very successful but very painful. "We are under a corporate integrity agreement, which does change your mindset," she says. "You get into the eyes of the government and once you do that you will need therapy."
During the audit, Lamkin says the hospital was very detailed in its record keeping. "We kept a copy of everything we sent. We also reviewed every chart for compliance with our physician advisor, and were confident we had medical necessity so we appealed," she says.
On the 31 charts involved in the audit, Lamkin says the hospital received 22 back saying they had been denied. "On the rest they didn't respond so we had to assume we were right. They were bounty hunters. They want your scalp," she says.
The biggest piece of advice she imparts is to know that you will get a RAC audit and to put systems in place today. "We were very focused on one-day stays, which is where the RAC auditors were looking," says Lamkin. "You engage your physicians and your staff. We always believed in a strong culture of accountability. One way to make people accountable is to audit, inspect, and correct. If processes are not in place you can't win an appeal."
In preparing for the RAC onslaught, Lamkin says it is essential for hospitals to have the right physician advisor in place to monitor medical necessity cases. At Hilton Head Regional, the chief of staff works part time as a physician advisor. "If done correctly, a physician advisor will be your saving grace," says Lamkin. "If the patient does not meet medical necessity, the call goes to the physician advisor, so it means your case managers and that doctor have to get along."
The hospital also started using a call center two years ago to advise physicians on the proper bed status of patients presenting in the emergency room. The hospital also does real-time billing audits and compliance checks on the front end.
Medical teams in hospitals caused nearly 158,000 avoidable injuries to new moms and their babies during childbirth in 2006, according to a new federal report that should be an eye opener for any health provider.
Not only do these tragic mishaps cause disability and anguish for patients, they add costly legal bills and extra days of expensive care that will never be fully reimbursed.
"Delivery of newborns (is) the most common reason for hospitalization," noted the Agency for Healthcare Research and Quality's report, which encourages providers to scrutinize their practices to better understand the reasons for such complications.
"Identifying which types of patient safety problems exist for different sub-groups of patients is an important first step in developing interventions to reduce disparities and achieve high quality of care for all patients," the report added.
The report was based on data submitted for 15 million discharges by 1,900 hospitals in 25 states, including the largest, California, Texas, New York, and Florida.
Against this backdrop of worrisome statistics, the report actually contained some good news.
Between 2000 and 2006, the rate of potentially avoidable injuries to women while giving birth vaginally without the use of instruments such as forceps declined 30%. For mothers whose babies were delivered vaginally with the use of instruments, injuries declined 21.3%. For mothers having a cesarean delivery, injuries declined 16.7%.
The report, however, doesn't explain what factors might have dropped the rates of injuries and study author Roxanne Andrews of AHRQ says it's an area for future study.
"It is possible that medical knowledge and practice has improved," she speculates. However, she quickly cautions a new study suggests improvements may not extend to the most serious maternal complications, which may have increased since 1998.
The report detailed the actual rates of injury, which were higher when instruments were used. For example, trauma to the mother during vaginal delivery occurred 160.5 times per 1,000 discharges when instruments were used, but only 36.2 times when instruments were not used. Obstetric trauma to mothers undergoing cesarean delivery occurred 3.9 times per 1,000 discharges. Injuries to the mother were most commonly perineum tears, which are usually preventable, the report said.
For the newborn, traumatic injury during childbirth occurred 1.6 times per 1,000 discharges. Injuries included broken collarbones, infections, and head injuries, many of which are very serious and sometimes debilitating and fatal.
The rest of the report was discouraging for the wide array of care disparities it disclosed for patients in wealthy versus poor communities, source of hospital payment, age, area of residence, race, and sex of the mom and infant. In many cases, the results were a surprise and counterintuitive.
For example, women giving birth who lived in the highest income communities suffered 44% more obstetric injuries during vaginal delivery than those from the poorest communities. And black and Hispanic mothers experienced fewer child-birth related injuries than whites. Asian-American and Pacific Islander mothers had the highest rate of injuries.
Mothers covered by Medicaid were far less likely to be injured while giving birth, 127 injuries per 1,000 deliveries, than women who had private health insurance, who incurred 185 injuries.
But injury rates for babies covered by Medicaid were higher than for those with private insurance, (1.7 compared to 1.5) the report said.
Injuries to babies also varied widely by geographic region, with those born in rural areas and the Northeast having 2 injuries per 1,000 deliveries versus those born in the West, 1.4, and those born in large metropolitan areas, 1.5.
White babies were injured more often (1.9 babies per 1,000) than babies in other racial groups (1.4 to 1.5 per 1,000 births.)
Hospital officials also couldn't explain some of the report's statistics. At Sharp Mary Birch Hospital for Women in San Diego, the hospital that delivers more babies than any other in California, 8,698 infants last year, Mary Henrikson, senior vice president and CEO, offered a few guesses.
For starters, rates of injury might be worse in hospitals "where you don't have 24/7 obstetrician coverage" in case complications arise. "Or maybe you have a physician using forceps who has never really gotten the technique," she says.
Henrikson says a hospital should own the responsibility for tracking down its own statistics so it can compare the facility with other hospitals and discover any potential problems.
"You've got to know the issues and know what you need to do to fix them," Henrikson says. "You need to know what's expected for your population, and if those numbers don't look right, start pulling those cases and look for trends, either with individual practitioners or with certain types of technology," she says.
"You may have started using a new type of vacuum extractor and the rates (of injuries) go up. If that's the only variable introduced in the situation, you may have to relook at what you buy to use," she adds.
An attorney who has won big money awards against hospitals in birth litigation also weighed in on the issue. Brian McKeen, former co-chair of the birth trauma litigation group for the American Association of Justice, was asked what he would do to lower obstetrical complications if he were a hospital CEO.
First and foremost, he says, he'd limit or stop allowing "young inexperienced doctors, some of them still in training" to be left alone when delivering a baby. "They don't always appreciate manifestations of fetal distress on the monitor and they don't always know that things are going awry," he says.
"In community hospitals, there's a pattern I see over and over again. The attending physician seems to think their role is to come in and catch the baby, and allow the nurses to oversee the management of labor and delivery," he adds.
Nurses also should be better educated, he says.
Most of all, however, is what he calls a failure of hospitals to perform appropriate introspective analysis of a case that went bad. "They should take these failures as a teaching opportunity to explain to the staff how they should be avoided."
Another issue that has brought lawsuits is what he describes as a failure of hospital staff to follow or even have appropriate chains of command when a patient's labor becomes troublesome. This could include "a chain of command that's regarded as hypothetical gobbledegook that's not really practiced in the real world. To the extent staff knows that there is one, they don't have a good understanding of when to invoke it or what steps are in the chain," he says.
Years ago, hospitals allowed physicians to rush to cesarean sections, sometimes for their own scheduling convenience. These days, he says doctors seem to want to avoid cesarean sections even when they're indicated, in part, because of a perception that they're associated with increased cost for the hospital and because now many hospitals are advertising their low c-section rates as a marketing tool, he adds.
"Have we gone too far the other way? Yes," McKeen says.
While their Capitol Hill days are now a memory, three former Senate majority leaders have become the latest voices to weigh in on what directions federal healthcare reform could take.
Two GOP senators—Howard Baker and Robert Dole—along with Democrat Thomas Daschle (with an earlier assist from George Mitchell) released their bipartisan proposal Wednesday that addresses delivery, cost, quality, coverage, and financing issues facing the healthcare system.
"We have no legislative writing authority, but that's an advantage in a way," said Baker. "It frees us to ascertain the points of agreement, to identify the areas of disagreement, and to suggest the boundaries of concern and the possibilities of accommodation."
While the men, working together as members of the advisory board of the nonprofit Bipartisan Policy Center, found many points to agree on, they did encounter one area of major disagreement: the public health insurance option.
"For many reasons, this is one of the most difficult issues we grappled with during our negotiations," Daschle said. "While I feel strongly that consumers should have a choice of a national Medicare-like plan, my colleagues do not and I understand where they are coming from."
"In the spirit of bipartisan effort," though, they decided to reach a consensus on the issue "to move it forward," Daschle said. The compromise: Build on the network of state and regionally-based insurance exchanges and allow states to establish plans—similar to those many already operating as part of their employee benefit programs.
"We decided that we weren't going to let two or three issues derail our total effort," Dole said. "We're just citizens. We don't have power. We don't have anything where we can march up and tell the leadership in the House and the Senate . . . but we do have the experience."
The Senate leaders' proposal, called "Cross Our Lines: Working Together to Reform the U.S. Healthcare System," reflects a series of forums that took place in 2008 that were hosted by each of them. The events addressed four key topics, or "pillars," of healthcare reform:
Promoting high quality, high value care
Making health insurance available, meaningful and affordable
Emphasizing and supporting personal responsibility and healthy choices
Developing a workable, sustainable approach to healthcare financing.
Among the issues that their budget-neutral plan calls for are:
A personal responsibility requirement for all individuals to purchase their own health insurance
Refundable tax credits that limit premium contributions to a percentage of income
Tax credits for small businesses that offer coverage
Limited fees for employers not offering or paying for health benefits
Establishment of an independent healthcare council to promote coordination among federal healthcare programs
The report also proposes placing greater emphasis on prevention, wellness, and care coordination, plus the need for stronger insurance reforms; elimination of medical underwriting for pre existing conditions and rating limitations; addressing Medicare's Sustainable Growth Rate formula for physicians; and financial assistance through Medicaid and tax credits.
The senators have sent their recommendations to Capitol Hill. Sen. Max Baucus (D-MT), chairman of the Finance Committee, said he saw many similarities with the legislation that his committee is now discussing behind closed doors. "The plan shows us bipartisan consensus is within reach," he said in a statement.
Ira Korman and his management team at the Texas Hospital for Advanced Medicine have stumbled upon a business model as vendors are eager to offer deep discounts, flexible payment plans, and immediate delivery of exclusive hospital equipment not yet available to others. Korman started a $12 million fundraising campaign for the Farmers Branch, TX, hospital based on that success.
