A subsidiary of Blue Cross Blue Shield of Michigan that sought to buy the membership of its largest competitor collapsed following threats by the Justice Department that it would file an antitrust lawsuit to block the acquisition.
Blue Care Networks of Michigan, the subsidiary of BCBS Michigan, sought the merger with Physicians Health Plan of Mid-Michigan. Prosecutors said in a statement they opposed the insurance companies' plans because the acquisition would have given BCBS Michigan control of nearly 90% of commercial health insurance market in the Lansing area.
"We welcome the decision by Blue Cross and Physicians Health Plan of Mid-Michigan to abandon their deal, which would preserve competition among health insurance companies in Lansing," said Christine Varney, assistant attorney general in charge of the Justice Department's Anti-Trust Division.
Blue Care Network is a nonprofit HMO owned by BCBS of Michigan, but it is a separate company. BCBS of Michigan has a 70% market share in Lansing. In 2008, BCBS of Michigan reported revenues of about $21 billion.
Physicians Health Plan of Mid-Michigan is a nonprofit in Lansing, and the largest competitor with a 20% market share. Sparrow Health Systems Inc., the largest hospital system in Lansing, owns PHP. PHP had reported revenues of about $250 million in 2008, according to the Justice Department.
Prosecutors pressured the companies with possible anti-trust action because they said it would have given BCBS of Michigan the ability to control physical reimbursement rates, and would have resulted in higher prices, fewer choices, and a reduced quality of commercial health insurance plans in the Lansing area, Justice officials said.
The insurers had a different take on the failed merger, saying it would have spread administrative costs over a larger membership base for Blue Care Network, and would have helped keep healthcare costs more affordable. In addition, it would have allowed Sparrow a greater ability to focus its human and capital resources on providing quality healthcare services to the region, the insurers said in a joint statement.
Both parties concluded late last week, however, that the transaction would not get clearance without litigation, the insurers said in a statement. Originally, both companies anticipated that this transaction would receive necessary regulatory clearance by the end of 2009.
As a result, "Blue Care Network and Sparrow decided that the substantial cost and extended time period it could take to gain clearance of the acquisition are not in the best interests of either organization," the statement said.
"Unless we could obtain federal clearance in a relatively short timeframe, which we have been told is not possible, a prolonged period of uncertainty would be extremely difficult for client employers, health plan members, and employees at both organizations," said Kevin Klobucar, BCN president. "It was not a desire of either organization to continue to focus our time and resources to litigate this matter."
"In light of the current regulatory climate, it has become obvious that we should move on and continue focusing on the best ways to serve PHP's members and our region," said PHP Mid-Michigan's President and CEO Scott Wilkerson. "Despite this outcome, we are pleased that PHP has operated on a business-as-usual mindset throughout this lengthy regulatory process."
The Justice Department said it was pleased with the final agreement.
"The merger would have likely led to higher prices, lower levels of service and decreased quality of healthcare for consumers," Varney said.
Citing an analysis by Goldman Sachs that competition in the insurance market is so weak that insurance companies can continue to raise rates even if it means losing customers, HHS Secretary Kathleen Sebelius asked five health plan leaders to "publicly justify" their proposed health insurance premium increases.
Sebelius' request was similar to what she made after a White House meeting with healthcare leaders last Thursday. Yesterday, insurers did not respond directly to Sebelius's request, but maintained that the administration is improperly focusing almost singularly on health insurers in advocating healthcare reform.
America's Health Insurance Plans, the industry lobby, issued a sharp rebuke of Sebelius' comment, but also did not respond specifically to her request.
"The men and women are working hard every day to make the healthcare system better and they do not deserve to be vilified for political purposes, " says Robert Zirkelbach, press secretary for AHIP.
Sebelius sent the letter a week after meeting about the proposed double-digit rate hikes with CEOs of UnitedHealth Group Inc., WellPoint Inc., Aetna Inc., Health Care Service Corp., and CIGNA HealthCare Inc.
"Last Thursday, I asked CEOs to post online the actuarial justification for premium hikes so consumers can see why their premiums are skyrocketing," Sebelius states. "Now, it's time for these insurance company CEOs to do their part to make the system more transparent for the American people. If insurance companies are going to raise rates, the least they can do is tell us why."
WellPoint, which has faced congressional scrutiny for the proposed 39% rate hikes for its subsidiary Anthem Blue Cross, did not comment directly to Sebelius' statement. Kristin Binns, a company spokeswoman, says, "We agree with the goals outlined by Secretary Sebelius and would participate in a comprehensive program that included all players across the health industry, not only in the insurance sector."
Like other insurers called to meet with Sebelius, WellPoint says the net income of health insurance companies represents only a small percentage of healthcare spending and "is only a fraction of what other players, such as pharmaceutical companies, earn," according to Binns.
"We need a comprehensive solution to make healthcare reform a success for Americans, and are disappointed that the administration continues to focus solely on health insurers," Binns adds.
CIGNA, however, "looks forward to continuing the discussion we had last week with Secretary Sebelius surrounding improved transparency and costs for all stakeholders in order to make prices of the care they receive clearer and evident to individuals," says spokesman Christopher Curran.
In her letter, Sebelius noted an analysis from the investment banking and securities firm Goldman Sachs, which found that that "price competition is down" and that "incumbent carriers seem more willing than ever to walk away from existing business."
"To that end, I am reiterating the request I made at our meeting on Thursday: post on your Web sites the justification for any individual or small group rate increases you have implemented or proposed in 2010, and continue to post such a justification in connection with any future increases," Sebelius.
In response, Zirkelbach says, "Health plans proposed more than a year ago robust insurance market reforms and new consumer protections to guarantee coverage for pre-existing conditions."
"Much more needs to be done in the current legislation to address the skyrocketing cost of medical care, which is making healthcare coverage unaffordable for working families and small businesses," he adds.
In her letter to insurers, Sebelius asked for data and other information linked to the proposed rate hikes:
If premiums increased more than estimated medical costs, she wants a description of what accounts for those differences.
Insurers' estimates on medical cost and utilization increases, the assumptions driving these estimates, and the basis for those assumptions.
The number of people who will be receiving premium increases, as well as the number of people who will be receiving different levels of premium increases, further broken down by characteristics including plan type, age, and sex.
Enrollment changes in different plans since the past year.
The number of people on whose experience the rate increase is calculated.
Any premium rating variation including rating variation by age and health status.
An affordability plan explaining what the company is doing to improve the affordability of healthcare, and the estimated financial impact of the company's affordability initiatives.
An explanation of any cost containment or quality improvement efforts made that affect the increase.
The expected medical loss ratio resulting from any premium increase.
Information on the percentage of premium revenues spent on medical claims, disease management, quality initiatives, administrative costs, profits, and executive salaries broken down by market type.
An overwhelming number of physicians say changes that may be necessary to meet more than two dozen "meaningful use" criteria proposed in a Medicare electronic health record (EHR) incentive rule would lead to decreased provider productivity, according to the Medical Group Management Association.
In responses to a MGMA questionnaire, physicians expressed confusion about the proposed rule, and its potential impact. Some said the program is unworkable, according to the MGMA.
The concerns are about CMS' proposed rule to implement provisions of the American Recovery and Reinvestment Act of 2009 that provide incentive payments for the meaningful use of certified EHR technology, which could amount to as much as $27 billion. The comment period for the rule ends March 15.
Specifically, physicians have expressed concern that the goals for implementing 25 meaningful use criteria would not be met because they aren't doable, according to William F. Jessee, president CEO of MGMA. Some providers believe that the administration plan is too rushed, there are too many regulations involved, and the use of the computerized records timetable is unrealistic.
Under the CMS proposal, incentive payments would be made to "eligible professionals and hospitals" to adopt, implement or upgrade certified EHR technology for meaningful use in the first year of their participation or for demonstrating meaningful use during each of five subsequent years. CMS' meaningful use focuses on electronically capturing health information in a coded format, track key clinical conditions, care coordination, and reporting of clinical quality measures and public health information.
The MGMA's questionnaire asked its members about how meaningful use criteria will impact productivity. More than two-thirds of the respondents—67.9%—said physician productivity would decrease, with another 31% saying that physician productivity would increase by more than 10%.
Jessee indicated that improvement in administrative efficiencies within a medical group would only justify the "high cost of software, hardware, and staff training" in a deployment of an EHR system.
"If the final rule mirrors those outlined in the current proposal, there is significant risk that the program will fail to meet the intent of the legislation, and that a historic opportunity to transform the nation's healthcare system will be missed," said Jessee in a statement.
The MGMA recommends that the Obama administration significantly revise the proposed rule.
The MGMA remains "strong advocates for the adoption of EHRs in medical groups and urge the administration to significantly streamline the incentive program requirements in the final rule to permit dramatically larger numbers of practices to embrace this important technology," Jessee added.
Through EHR incentive programs, CMS said it hopes to expand the meaningful use of certified EHR technology. Certified EHR technology used in a meaningful way is one piece of a broader health information technology infrastructure needed to reform the healthcare system and improve healthcare quality, efficiency, and patient safety, CMS officials said.
Physicians expressed concerns over several of the proposed criteria for meaningful use. In the MGMA questionnaire, 45.9% of the physicians stated the proposed criteria, which would require 80% of all patient requests for an electronic copy of their health information be fulfilled within 48 hours, would be "difficult" or "very difficult" to achieve. Nearly 54% stated that it would be difficult or very difficult to reach the criteria of having 10% of all patients be given electronic access to their health information within 96 hours of the information being available.
In the MGMA analysis, physicians offered several views, elaborating on their concerns, according to MGMA records.
"For the various percentage requirements, obtaining number or data through an EHR will not be the problem," one physician wrote. "It will be tracking the denominator data that will be difficult since it may require manually tracking to calculate the percentage."
"Given there is not an EHR out there that currently meets all the criteria of meaningful use, 2011 is not enough time to get a new/upgraded system in place and adopt all the new processes that will be required for meaningful use," stated another physician.
"I have great concerns about the feasibility of complying with the [requirements]," opined another physician. "So much so, that I am re-focusing efforts with our physicians on the long-term benefits of EHR for improved workflow, patient safety, productivity, etc. and not at all on qualifying for the stimulus funds since the ability to do so seems very questionable at best."
MGMA conducted the research in January and February 2010, and data include feedback from 445 respondents representing providers in medical group practices throughout the United States.
Leaders of the nation's four largest health plans told HHS Secretary Kathleen Sebelius at a White House meeting Thursday that they share a "common purpose" with her to improve the nation's healthcare system, but they defended their proposed double-digit rate hike in the individual market.
The meeting was seen as cordial and somewhat productive, but essentially broke no new ground, with both sides sticking to their months' long talking points: The administration saying the insurance premiums are too high and the insurers blaming healthcare costs for the increases.
To add further weight to the administration's position, President Obama stopped by the meeting, bringing with him a letter from a health plan consumer facing a 40% rate hike in Ohio, according to the White House. "Seeing that kind of rate increase is unacceptable and unsustainable, as the president said," Sebelius stated later. She added that she sought "transparency" from the insurance executives, and asked them to post their rate requests online.
Insurers attending the meeting with Sebelius were Aetna CEO Ron Williams, UnitedHealth Group CEO Stephen Hemsley, WellPoint CEO Angela F. Braly, CIGNA CEO David M. Cordani, and Health Care Service Corp. CEO Patricia Hemingway-Hall.
The health plan leaders said layers of bureaucracy must be reduced in healthcare, and signaled support for broad participation in the overall health insurance pool to reduce costs. During the meeting, Williams, the Aetna CEO, insisted that insurers want to cooperate in reform efforts.
"We really share a common purpose. We recognize there are issues, particularly in the individual insurance market that need to be addressed," Williams said.
The proposed rate hikes are "really reflective of other parts of the healthcare delivery system," he added. Williams' comments were made during a brief open portion of the mostly closed session, reported by a pool journalist and released by HHS.
After the session, Hemsley, the CEO of UnitedHealth Group, said the insurers' participation reflected a "desire to identify a fiscally responsible, sustainable path forward that truly bends the cost curve."
"We sought to make clear our longstandng commitment to expanding access to quality care for all Americans and also to discuss the many factors that are driving up the cost of care for millions of people across the United States," he said.
Cordani, CEO of CIGNA, said insurers went to the meeting "with a willingness to seek a sustainable solution."
"We discussed and offered our perspective on how to solve our country's healthcare challenges by reduced cost, improving affordable accessing, and increasing quality of care, " Cordani said. "The current health system—whether commercial or government—is not on a sustainable track and challenges job security and growth."
Although Obama and Sebelius have continually chastised the insurance industry for the rate hikes in the individual markets, "The conversation today behind closed doors did not feel like it was a vilified industry being chastised by the president or the secretary," Cordani said.
Following the meeting, White House Press Secretary Robert Gibbs said when President Obama stopped at the morning meeting, he "went on to discuss the need for comprehensive reform, the need for insurance companies to not block comprehensive health insurance reform."
Sebelius "has asked insurance companies to provide actuarial data that justifies such a huge increase in healthcare premiums at a time in which healthcare information is not nearly on the order of the magnitude of what we've seen here," Gibbs said.
In a conference call with reporters after the meeting, Sebelius said the Democratic proposals for healthcare reform would result in "leveraging power for individuals who are now in a situation where they are priced out of health insurance."
Sebelius said she wants the health insurers to put all cost information on a Web site to "shine a bright light" on the issue.
Representatives of the National Association of Insurance Commissioners also attended the meeting, and said they stressed the need for "thorough and objective" rate review. Premium increases must be actuarially justified without discrimination against any one group of policyholders, according to the group.
The American Nurses Association (ANA) plans to launch a diversity awareness resource center this year to better serve the "full complexity of the U.S. population" in healthcare settings, ANA officials say.
The center will include a database of materials related to different ethnicities, cultures, sexes, and other information to enable nurses to better serve an increasingly diverse patient population. The resource center will give nurses the opportunity to ensure fair and equitable treatment of patients, particularly for individuals facing difficult health and financial issues, according to the ANA.
"It is vital to underscore that our most vulnerable neighbors are simultaneously the hardest hit by bias while being the least able to cope with the associated risks and consequences," said ANA President Rebecca M. Patton in a statement.
"Clearly, cultural competency is a major responsibility for nurses since it sits right at the nexus of healthcare and social justice," Patton said. "This program will be an important resource to enable nurses to acquire the requisite knowledge and behaviors to champion a culture of compassion in healthcare."
To gauge existing cultural competency among nurses, the ANA also will conduct an online survey of attitudes, says Emily Piccirillo, grant development manager for the association, which is based in Silver Spring, MD, and represents 2.7 million nurses. The new center may be launched within the next few months, she says.
In its grant request, the ANA said it would include in the resource center information for nurses that will provide a glimpse into cultural issues that affect patients, "while providing methods for managing information clinically through negotiation once it is obtained." Pfizer, the pharmaceutical company, provided the funds to the ANA. The amount was not disclosed.
ANA wants to "keep pace with the increasing diversity of the American population, and to respond to it, and approach it with strength" Piccirillo says. "It's continuingly evolving and the demographics are evolving. We are looking at the patients as well as the families."
The new initiative would include a new fulltime staff position at the nursing practice and policy department to work with nurses and be responsible for "collecting, managing and disseminating cultural competency resources to the national nursing community," according to the ANA's grant application.
Piccirillo described the center as a "centralized online information bank." A dedicated Web page on the ANA Web site, www.nursingworld.org, will be developed to house the resources for easy access and navigation. In addition, nurses with specific areas of expertise will be recruited to join as volunteer counselors.
The president of a Washington (DC) Hospital Center said Wednesday that findings from an internal review have prompted the hospital to begin proceedings to dismiss 15 nurses for missing work because of a blizzard. The hospital initially planned to discipline 11 nurses, but has added four to the list since it launched an investigation last week.
In a memo to hospital staff released late Wednesday, Washington Hospital Center CEO Harrison J. Rider III said three employees, who were initially planned to be dismissed, have been reinstated. Hospital officials did not say whether the employees were nurses. However, Nurses United of the National Capital Region, the local nurses union, identified them as nurses. A hospital spokeswoman could not be reached Wednesday night.
Altogether, the hospital is dismissing 21 employees—15 nurses and six "essential" personnel members, Rider said.
Rider expressed displeasure in the employees who are being fired. "While I am very pleased that we found merit in some of the cases we reviewed, we have not found any redeeming circumstances in the behavior of the others, so we are proceeding with the dismissal of 21 total associates," Rider stated.
Dismissals at Washington Hospital Center—the largest private nonprofit hospital in the DC area—have generated widespread controversy. Nurses United of the National Capital Region filed a grievance against the hospital. Stephen Frum, chief shop steward for the 1,600-member nurses union, says the union's grievance is focused in part on hospital policy which indicates that employees would not be dismissed during a declared emergency.
Frum says an additional four nurses were suspended one or two days, and the fact the nurses didn't show up at work during blizzards will be in their hospital file.
At least one nurse who was fired said she would return to work, Frum says. He hasn't talked to the others yet.
The American Nurses Association, meanwhile, has said it is looking at potential ramifications of the hospital's action, saying it is unheard of for a hospital to fire nurses because of not reporting to work because of prohibitive weather conditions. An ANA official described the hospital's actions as "quite damaging to the morale of nurses."
However, Rider said that during the blizzard "most of us served selflessly, but some chose not to come to work and walked away from the commitment they made to the patients and their fellow associates. We have continued to review each case to assure that those who shared our commitment to our patients are distinguished from those few who did not."
Rider said he was "very pleased that we have been able to rescind the dismissal of three associaties." He asked fellow employees to "welcome these individuals back to work, as we have concluded that they share our essential commitment to our patients."
The staffers who were fired did not report to work when storms dumped more than 40 inches of snow on the DC area between Feb. 5 and Feb. 11. Hospital officials said they provided transportation for the nurses and also alerted staff beforehand that they should make accommodations, such as staying at the hospital, when the storm hit.
"We do not like, nor do we take lightly, the dismissal of any associate in any circumstance," stated Rider. " "We look at each case with an eye toward favoring the associate, so that we can be comfortable that we have, and will continue to undertake, a review process that is fair and stays true to our values, and the enormous commitment each of us has made in choosing our career in healthcare."
"This has been our mindset as we carefully reviewed the events of the snowstorm and the facts we had at the time," Rider wrote. "Our process was open, so that if additional facts were brought to our attention, we re-evaluated each case."
Rider said the blizzards had a significant personal and economic impact on the hospital.
"The DC Chamber of Commerce is currently conducting a survey to determine the economic impact of the snowstorms on Washington business," Rider said. "I know that our additional expense was $2.5 million for wages, food, and snow removal."
While others had seen their business falter during the storms, "ours was actually increasing," Rider said. The hospitals' daily census grew from 675 to 740, and 90 babies were delivered.
To accommodate workers who spent the night at the hospital, Rider said the hospital "provided 7,300 meal vouchers and sleeping arrangements at various times, as best as possible, for 2,200" hospital staffers.
In his memo, Rider thanked employees who worked during the snowstorms, adding: "We were able to, once again, remind the community we are here for them and we never close."
HHS Secretary Kathleen Sebelius meets today at the White House with leaders of health plans that she has sharply criticized for proposing extremely high rate increases on individual markets.
Meanwhile, a congressional oversight and investigations panel announced it has broadened an inquiry into insurance practices involving four of the nation's largest for-profit health insurance companies.
Sebelius has said she wants to discuss the rate hikes with health plan leaders of Aetna Inc., CIGNA Healthcare Inc., Health Care Service Corp., the UnitedHealth Group Inc., and WellPoint Inc. Officials of the National Association of Insurance Commissioners also have been invited. Sebelius had criticized proposed individual coverage rate hikes from 23% to 56% as "shocking."
Sebelius had planned to meet with insurers yesterday, but it was postponed because of a scheduling conflict, HHS officials said. The meeting comes as the Obama administration continues to put pressure on insurers to justify rate proposals.
Meanwhile, Rep. Henry A. Waxman, D-CA, chairman of the House Committee on Energy and Commerce, said the committee has asked top officials of WellPoint, Aetna, UnitedHealth Group, and Humana about denied claims related to pre-existing conditions and company policies related to coverage of maternity care in the individual market.
Waxman and Rep. Bart Stupak, D-MI, chairman of the subcommittee on oversight and investigations, asked the hospital executives to testify about the issues at a March 23 hearing.
Waxman and Stupak's letter asked the companies to provide e-mails and other documents related to their coverage in individual markets, as well as their listed and proposed rate hikes, and training materials.
The health plan leaders called to testify are: Angela F. Braly of WellPoint; Stephen Hemsley of United Health; Michael B. McCallister of Humana; and Ronald Williams of Aetna.<
Regarding the congressional action, WellPoint spokeswoman Kristin Binns says she could "confirm receipt of the [House] letter. We are reviewing it and will respond appropriately," she says.
Last month, the investigations subcommittee questioned the WellPoint President and CEO Braly about a proposed rate hike of up to 39% by Anthem Blue Cross, a California subsidiary of WellPoint. Braly stated that the premiums were reasonable, but Waxman said internal company documents indicated otherwise.
In a statement released Wednesday, Sen. Russ Feingold and Herb Kohl, both Wisconsin Democrats, asked WellPoint to justify rate hikes for more than 13,000 residents of their state.
"Last year, as 14,000 Americans lost their health insurance coverage each day, WellPoint nearly doubled its profits and raked in $4.7 billion," Feingold said in a statement. "Washington needs to find the courage to take on the special interest and act because if it doesn't, insurance premiums will continue to skyrocket and Americans will continue to be denied or dropped from coverage because of pre-existing conditions or because they change jobs."
The insurance lobby, America's Insurance Plans, contends that rate hikes can be attributed to rising healthcare costs for hospitals, physicians, and prescription drugs.
After talking with top lawmakers, maybe he should have a follow-up with a specific healthcare focus: bring hospitals, payers, and providers–and no politicians–to the table, and talk innovative approaches to healthcare.
During that discussion, Obama and healthcare stakeholders should consider Accountable Care Organizations (ACO), which some believe may jumpstart healthcare plans into a new cosmos of care, and would be truly emblematic of bringing everyone together as partners. We'll know over time.
The debate is truly in the embryonic stage, with the basic premise of ACOs removing fee-for-service and replacing it with a payment for a fixed amount per person, with quality and partnership the key elements for Medicare beneficiaries and others. Doctors and hospitals would receive bonuses for exceeding quality-of-care measures. In turn, they would also get penalties for providing lower quality or higher cost per patient.
One governmental agency, the Medicare Payment Advisory Commission, (MedPAC) has been at the forefront of the ACO debate. In a report to Congress released this week, "Medicare Payment Policy," the commission noted that it has been an "early proponent of payment reforms" that would include ACOs.
The current report noted how ACOs could deal with the "fundamental problem of the current Medicare system,"–namely–that "providers are paid more when they deliver more service without regard to quality or value of those additional services."
In contrast, ACOs represent an example of a "policy that may benefit from coordination with private payers,"according to the commission report.
Marc Bard, MD and Mike Nugent, in a paper for Navigant Consulting, "Accountable Care Organizations and Payment Reform: Setting the Course for Success," wrote that they believe healthcare leaders should immediately begin to embrace ACOs. As a team examining ACOs, Bard says he focuses on delivery system design and leadership, and Nugent focuses on payer innovation and strategies.
"Using the ACO compass, new payment reform guardrails and a commitment to greater engagement, early adopters can begin redesigning their current systems to better position themselves for inevitable change," Bard and Nugent state in their paper. "For those sitting on the sidelines, there is no time to waste."
"Payers and providers must jointly commit to embarking on a journey that leads to both ACO driven clinical transformation and payment reform," Bard and Nugent wrote.
Specifically, Nugent noted the role of payers, which sometimes stand on the sidelines in ACOs. Under the current system, "It's been payer vs. provider. And everyone loses. That is what is driving payers and providers increasingly to the table," Nugent says. "It is time to imagine a fee schedule that payers, providers and patients could agree to that would pay for productivity, and quality."
So there will be plenty of debate ahead. "Obviously this is not going to change overnight, nobody can just change the culture," says Bard. "This is fundamentally designing a different model."
Under the House bill approved in November (HR 3962), provisions are included that call for incentive payment for pilots encouraging ACOs in both Medicare and Medicaid beginning in 2012. The Senate health reform bill allows for providers organized as ACOs that voluntarily meet quality thresholds to share in the cost savings they achieve for the Medicare program. These shared savings programs also must have "adequate" participation of primary care physicians, and would also start in 2012.
While the health reform package may not survive intact–ACOs pilot programs are likely to withstand political changes.
Bard and Nugent acknowledge there will be resistance to ACOs, especially among those who believed ACOs would be a reincarnation of the Independent Practice Associations (IPAs) of the early 1990s or the Physician Hospital Organization of the late 1990s, which focused on consolidation and increased market share at the expense of care quality and added value, according to Bard and Nugent.
But they insist that ACOs "offer the greatest potential yet to deliver better quality care more efficiently."
There are cautionary flags out there, however.
One caveat is put forth by one of government's biggest boosters–the Medicare officials. "If there is no financial pressure on providers that choose to stay in the current fee-for-service payment systems, their incentive to take a risk on a new system will be limited–and only providers who expect that they will fare better financially under the new payment method will volunteer," according to MedPAC's report that was released this week stated. "As a result, all other things being equal, voluntary payment reform would increase, not decrease. Steady pressure on unit prices under Medicare's current payment systems, coupled with appropriate redistribution of payments will help address both of these challenges."
So, this leads us all back to the table. Maybe providers, payers, and patients should meet at the next Blair House summit. Mr. President, are you listening?
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The Senate overwhelmingly voted Tuesday night to delay for 30 days a 21.2% pay cut in Medicare reimbursement for physicians. The tally came after Sen. Jim Bunning, R-KY, agreed to a vote after blocking the measure since last week.
By agreeing to the physician pay cut delay, the Senate finally joined the House, which approved its 30-day delay legislation last week. By a 78-19 vote, the Senate approved the measure.
Bunning repeatedly blocked the $10 billion measure since last Thursday, saying it was too costly, referring not only to the physician issue, but also to other programs, such as Medicare, COBRA, and unemployment and highway projects.
While Bunning put a stranglehold on the measure, physician organization grew increasingly angry with the Senate, saying its inability to pass legislation was detrimental to patients, particularly senior citizens.
Before voting, Democrats and Republicans spent hours on Tuesday bickering over the wide-ranging ranging legislation. Around 9 p.m. last night, however, Democratic leadership and Bunning reached an agreement. Bunning was given the opportunity to offer a tax loophole amendment on paper products, which was defeated.
"We have a clear cut example of what's wrong with Washington, DC," said Sen. Patty Murray, D-WA, on the floor. "One single Republican senator is forcing doctors to take a 21 % cut" that could have an impact on senior citizens, Murray said.
Through much of the day, Bunning said he was steadfast in voting against the legislation, adding that the country was "going to implode in [a] massive amount of debt."
At one point on Tuesday, Bunning indicated that he had support of physicians in Kentucky, despite the physician pay cut issue. "As far as docs are concerned, I have a history with ‘doc fix," Bunning told his colleagues, referring to the nickname of the legislation to stave off the physician pay cuts. "I don't need to defend myself to the majority leader, just check with the Kentucky Medical Association."
Without Senate action, the physician pay cut technically took effective on March 1, but the Centers for Medicare and Medicaid Services postponed the action by instructing contractors to hold claims for at least 10 days. The CMS indicated that it expected a congressional response would prevent the cuts.
Sen. Max Baucus, D-MT, said that it was important that "we're finally going to see doctors get paid."
The physician pay cut issue has been dependent continually on congressional action, much to the consternation of physicians. On Dec. 19, Congress voted to delay the scheduled payment cut until March 1.
Specifically, the Medicare payments were scheduled to be cut across the board in accordance with the sustainable growth rate (SGR) formula.
The proposed delay ostensibly is to give Congress time to adjust the SGR formula. SGR links Part B Medicare reimbursement to the gross domestic product. The formula has led to proposed large cuts annually, which physicians have successfully worked to delay.
Should a hospital fire a nurse for failing to make it to work in a blizzard?
A Washington, DC, hospital thinks so, and has fired 11 nurses and at least five other staffers for staying home and not going to work in blizzards that pulverized much of the metro area on two occasions last month, dropping more than 40 inches of snow. One local resident—President Obama—dubbed the conditions "Snowmaggedon."
Despite the conditions, "We don't shut down—and we need everybody. Nurses are essential," says So Young Pak, spokeswoman for the Washington Hospital Center.
Pak says a "small number" of people who were terminated demonstrated a "disregard for the well-being of our patients and community we serve." Some of the fired nurses notified the hospital they weren't going to work even before "the first snowflakes fell," Pak says.
The local nurses union, Nurses United of the National Capital Region, has filed a grievance against the hospital, and the American Nurses Association (ANA) says it is looking at potential nationwide ramifications of the hospital's action, saying it is unheard of for a hospital to fire nurses because of not reporting to work because of prohibitive weather conditions.
"This is the first time I've heard of such a thing," says Cheryl Peterson, director of nursing practices and policy for the ANA.
The hospital's actions "is quite damaging to the morale of nurses," says Peterson.
The Washington Hospital Center, the largest private hospital in DC, has indicated it may fire as many as 20 people in the continuing probe, while other hospital employees are still under investigation. The Nurses United union did not respond to interview requests.
"We are closely following our process, procedures and contracts in considering discipline for those who failed to live up to their professional responsibilities, Pak adds.
Over the weekend, union representatives told the Washington Post that about 250 of the hospital's 1,600 nurses did not make their shifts at some point during the storms that hit the area between Feb. 5 and Feb 11. The hospital's weather emergency policy, however, does not mention potential firing as a consequence for failing to return to work, according to the Post.
As a result, ANA "is looking into the broader implications of the DC hospital action. Nurses live where there are disasters happening, such as hurricanes, ice storms. When you look at what happened in DC, it is important to consider the implications in other areas, and whether we would see this kind of trend elsewhere—we hope not," says Peterson.
The hospital believed it had no choice but to dismiss the nurses because of the need for patient care, says So Young Pak, spokeswoman for the hospital.
Some nurses called in to stay home even before the snow began falling and some "before their scheduled shift to say they were not coming in; some refused available transportation; others refused accommodation to stay at a hospital in order to arrive on time for their shift, to name a few," Pak says.
"We recognize this was a blizzard—it never happened before," says Pak. "We informed [staff] this was going to be big—that you need to have your own emergency plan in place."
