Non-profit hospitals and health systems that raise more money than peer institutions target major donors and invest more resources in fundraising.
Spending money to raise money and targeting major gifts instead of annual gifts provide good returns investment, according to a new report from the Association for Healthcare Philanthropy.
AHP's annual Report on Giving defined high-performing organizations associated with non-profit hospitals and health systems as raising more net funds than 75% of all responding institutions.
These high-performing organization allocated an average 13.5% of resources to research on potential donors and major gifts, compared with 6.4% of resources for all institutions. In FY 2015, the median amount raised by high performers was more than $11.9 million.
AHP said that a key difference between high performers and lower-performing organizations was the type of fundraising activities pursued. High performers focus less on annual gifts and special events while putting more emphasis on major gifts and corporate giving as their major fundraising sources. Planned giving also accounts for a higher share of fundraising revenue for high performers than the average institution.
"Organizations should utilize all channels for giving, but those that raise money most effectively focus their efforts on the most productive fundraising activities," AHP President and CEO Steven Churchill said in remarks accompanying the report.
Foundation
Location
1
Dignity Health
San Francisco, CA
2
Children's Hospital Los Angeles
Los Angeles, CA
3
Seattle Children's Hospital Foundation
Seattle, WA
4
Sutter Health
Sacramento, CA
5
Miami Children's Health
Foundation
Miami, FL
6
Wake Forest Baptist Medical Center
Winston-Salem, NC
7
Boston Medical Center
Boston, MA
8
Hoag Hospital Foundation
Newport Beach, CA
9
UMass Medical School / UMass Mem
Shrewsbury, MA
10
Medstar Health
Columbia, MD
AHP's Report on Giving surveyed 199 institutions on their FY 2015 philanthropic activities, for response rates of 15.6%. AHP said it was not authorized to reveal the amount raised by each healthcare institution.
AHP's 5,000 members in the United States and Canada represent more than 2,200 healthcare organizations in North America and abroad that raise more than $10 billion each year.
Medical doctors don't need to undergo a near-death experience to better engage with patients. What they need is empathy, says a pulmonary disease specialist who learned first-hand.
It took her own near-death experience in 2008 for Rana L.A. Awdish, MD, to comprehend the gulf in empathy that exist between hospital staff and the patients in their charge.
Awdish, who specializes in pulmonary disease, critical care medicine, and internal medicine at Henry Ford Health System in Detroit, MI, details her experience in a recent essay in the New England Journal of Medicine.
She spoke with HealthLeaders Media about the need for understanding the patient perspective. The following is a lightly edited transcript.
HLM: What is needed to understand the patient perspective?
Awdish: You don't need a near-death experience. What you need is empathy. Physicians have many things that they have to tend to every day. We cut back on those conversations that connect us with our patients. That is a mistake.
All of that is reciprocal and it's why we went into medicine in the first place. But we are at risk of demoting that on the list of things that are important in the day, just because of the many demands placed on us.
In every encounter, center yourself with your patient and try to understand from their perspective what they are going through, because that is the first step of empathy, taking the perspective of another person.
HLM: What happened in your experience as a patient that allowed you to see the lack of empathy that you had not seen as a physician?
Awdish: My position changed from being the physician to being the patient, being in the patient's bed.
The things I thought my patients needed from me, the highly technical expert care we deliver so proficiently, I took that as a given. I knew that would happen.
I didn't know that as a patient I would have needs beyond that. That sounds naïve, that I perceived that all my patients wanted was to get well, but I truly saw suffering as an extension of the disease. I thought my role was to cure the disease, or at least treat it, and the suffering would be alleviated. There was no reason to tend to it in the moment because it would just delay solving the problem.
HLM: How do you walk the line between empathy and being overcome by patients' suffering?
Awdish: There is this idea that we are all taught in medical school about the necessity of partition, maintaining composure regardless of the circumstances so that your emotions are not the ones in the room that matter.
We were taught that both as a means of preservation, but also of protecting our patients from our emotions. I would argue that that [guidance] is antiquated and misguided. To foster resilience in physicians there have to be moments of connection and shared purpose and attention to suffering because that is what fulfills us in the end.
It is not prescribing the right anti-hypertensive. It's connecting with our patients as people, feeling their suffering and feeling that you have alleviated it somewhat.
We don't get depleted by that. There is reciprocity in that. That is the frameshift that has to happen. The fear of connection is misguided.
HLM: Can empathy that be taught?
Awdish: If it's not, I should retire because I am fully convinced that it is where we need to go. Yes, there is good evidence that perspective taking can be taught, that having a sense of your own implicit bias can be taught, and that it can be improved upon. We use situational learning to do that, but there are many avenues by which we can affect change.
HLM: What have you done at Henry Ford to address empathy?
Awdish: The first thing was to start a discussion. We developed programs that are professional development tools.
We spend all of our time in medical school and residency and fellowship learning clinical skills and content and we don't spend a lot of time developing our emotional intelligence, our narrative competence, our ability to get a history from someone that is authentic to who that person is, but not just trying to corral them into 'yes' and 'no' answers.
Everyone goes into medicine because they want to do right by their patients, and they don't want to harm them. We in medicine have a history of unintentionally harming our patients through our behaviors, and so we are all focused on changing that.
HLM: What metrics do you use to know you are succeeding?
Awdish: The measure of success that I care about most is this sense of relationship between physicians and their patients. One of the tools to measure that is physician engagement. When physicians have relationships that are nurturing and fulfilling and their patients are co-creating a care plan with them, those physicians have longevity.
CMS has a measure called CAHPS, which looks at provider communication, which measures how effectively we are communicating as rated by our patients. It's under the umbrella of patient satisfaction, and all of those intangibles that go into someone wanting to recommend your practice or wanting to come back to you.
There are issues with the survey, as there are with every tool, but we have to embrace it and note that physician communication drives those scores.
HLM: How do you avoid making this 'one more thing' that frazzled physicians have to contend with?
Awdish: There are very few interventions that you can make in healthcare that not only engage the patient in their own care, that also improve adherence to medication, but also improves provider engagement and longevity and resilience.
That is the Holy Grail. How do we make patients happy at the same time as we are engaging providers and enhancing their professional fulfillment? This to me is so tangible.
We were medical students who were thrown into family meetings with no skills, no road map, no plan for how to get from A to B, no sign posts to watch for.
Until I found those tools, I would find ways to avoid those situations because I wasn't skilled. Being shown what to do gave me the courage to enter those conversations knowing they would turn out OK and I could help people and not wreck myself in the process.
There are very few things that can do that, that can engage both sides. It's team building, so when nurses are drawn into this, the whole team functions better. I don't think there is a downside to communication training.
HLM: There are thousands of employees at hospitals. How do you get everyone on the same page?
Awdish: No one has the resources to assign one-on-one care coordinators. When you orient people to a mission, when as an institution you let people know what their value is and not just their jobs, and you engage them in patient care in whatever position they are in, that they understand they are part of the care team, it translates across the culture.
These are not things that are specific to physicians and nurses. If you are in healthcare you need these skills because you have points of contact and you cannot imagine the impact you have on patients.
That is part of what we do at the new employee orientation. It is transporters, and billing clerks, and radiology techs, and everyone engaged in the process. To show them what it means to work here and the lives that you can impact, when maybe you don't think that that is what you signed up for when you signed up for the job. It changes the conversation.
HLM: Can what you're recommending be done at hospitals with few resources?
Awdish: You can start with a simple focus on empathy, which is taking the perspective of the other person, identifying what you see that they are feeling, whether it is sadness or anxiety or being overwhelmed, and reflecting it back to them so they know they are being seen. In many ways that is what is missing in healthcare.
Our patients feel they are seen as diseases rather than as people who are bearers of disease. By reinserting empathy in every interaction you can overcome much of that.
Health system leaders, hospital communities, and the AHA are expressing concern about the travel ban issued by President Donald Trump.
Citing the experiences of his immigrant grandparents, Montefiore President and CEO Steven M. Safyer, MD, offered a spirited critique of the travel ban imposed Friday by President Donald Trump.
"We are in the midst of a challenging time," Safyer wrote in a letter this week to colleagues at the Bronx, NY hospital. "The ideals upon which our nation was built are being questioned."
"My grandparents settled in the Bronx from Poland escaping persecution and found a community that embraced them in a country that gave them an opportunity to build a new life," he wrote. "As an institution, Montefiore was founded on our commitment to healthcare as a basic human right, and we continue to live our values of humanity, innovation, teamwork, diversity and equity."
Safyer said the hospital would not cooperate against any attempts to violate access to healthcare or medical training. That includes:
Refusing to provide information about the immigration status of patients, students, or employees without due process legal proceedings.
Refusing any attempt to learn or question anyone about their immigration status, except as legally required.
Treating equally all applications to the Albert Einstein College of Medicine or graduate programs regardless of their immigration status.
Continuing to provide financial aid and other support services for students regardless of their immigration status in the event that the Deferred Action for Childhood Arrival policy is curtailed.
"Montefiore will not waiver on our commitment to our principles," Safyer wrote. "We will continue to stay true to our values in support of our patients, associates, students, trainees and community."
AHA, Other Health System Reactions
Safyer offered one of the more strongly worded criticisms of the travel ban. The American Hospital Association was more circumspect as it raised concerns that the ban would negatively affect healthcare delivery.
"We are concerned that, without modification, President Trump's executive order on immigration could adversely impact patient care, education, and research," AHA President and CEO Rick Pollack said in a media release.
"We are hopeful that the Administration will find solutions to preserve patient access to medical and nursing expertise from across the globe, ensuring care is not disrupted. Hospitals and the patients we serve often rely on international collaboration among clinicians to advance care and an efficient visa program is essential to their success. We rely on a diverse workforce to deliver the care patients and families need. We will work with the Administration to come up with a solution that patients can continue to rely on for their care."
The Mayo Clinic said this week it was "currently assessing the situation," particularly as it relates to the status of 80 staff, physicians and scholars, and 20 patients who have ties to the seven country included in the executive order.
"We are not aware of any Mayo Clinic staff traveling for Mayo Clinic business who are currently affected. We are not aware of any Mayo-sponsored non-immigrant visa holders who have been immediately affected. We are still unsure of how Mayo staff and their families who are traveling for personal reasons may be affected," Mayo said in a media release.
"A number of Mayo Clinic staff and trainees have expressed concern about the potential impact this order may have on their future plans, and we are working to more fully assess and advise on these concerns in a rapidly changing legal environment."
On Sunday, Mayo Clinic CEO John Noseworthy, who last month met with President-elect Trump, expressed concern and added that he was "actively monitoring this situation."
Also this week, Yale New Haven Health System told its more than 20,000 employees that all noncitizens should "strongly consider" not leaving the country because of the travel ban, while Hartford HealthCare CEO Elliot Joseph wrote in a blog post that "people of all political persuasions are feeling a bit inundated by—and confused about—recent changes to entry requirements to the United States, and related court decisions."
An open letter to Toby Cosgrove, MD, CEO of the Cleveland Clinic, urges the organization to reschedule a fundraiser planned to be held at a Trump-owned facility, and to condemn the travel ban.
The letter is signed by medical students, residents, physicians, and other healthcare workers opposed to "the Cleveland Clinic silently continu[ing] to promote ties with the Trump administration."
Cosgrove is a member of the White House's "strategic and policy" forum and did not immediately comment on the letter, which was posted Tuesday.
Asked about the fundraiser, Clinic spokeswoman Eileen Sheil told CNBC there would be "No change for this year," but added that "we are not committed after this year's event."
Sepsis has a higher rate of readmission than heart failure, but the federal government does not penalize hospitals for excessive readmissions due to sepsis.
Despite being the number one killer of hospital patients, a factor in late deaths, and leading cause of hospital readmissions, sepsis is not used by the federal government as a measure for care quality and reimbursement penalties, according to a study by the University of Pittsburgh School of Medicine and VA Pittsburgh Healthcare System.
"One thing we know is that patients who do get sepsis get rehospitalized very frequently," said lead author Florian B. Mayr, MD, faculty member in Pitt's Department of Critical Care Medicine and the Center for Health Equity Research and Promotion at the VA Pittsburgh.
The Centers for Medicare & Medicaid Services tracks and penalizes hospitals for excessive readmissions for heart attack, heart failure, chronic obstructive pulmonary disease, and pneumonia.
"Sepsis has always been under-appreciated. It's well known among intensivists," he says. "We know how commonly we see sepsis in the hospital, and particularly in the intensive care unit. But people have not taken as much notice as when you talk about heart failure or pneumonia."
For their study, Mayr and his colleagues analyzed data from the 2013 Nationwide Readmissions Database, which comprises 49% of U.S. inpatients, for the four conditions and sepsis. They found that sepsis accounts for 12.2% of readmissions, followed by 6.7% for heart failure, 5% for pneumonia, 4.6% for COPD and 1.3% for heart attack.
The estimated average cost per readmission for sepsis was $10,070, compared to $9,533 for pneumonia, $9,424 for heart attack, $9,051 for heart failure and $8,417 for COPD.
"The awareness is definitely increasing, and our study and other recently published studies make the repeated point that this is a big problem," Mayr says.
"Maybe adding it to the Hospital Readmissions Reduction Program may fuel incentives and innovation to reduce unplanned or avoidable readmissions and the associated costs."
The study was published this month in the JAMA, and Mayr says the findings highlight the need for coordinated efforts to develop new medical interventions aimed at improving sepsis outcomes and reducing readmissions.
"If we, as a nation, place such high emphasis on reducing readmissions for the other four conditions, then we really need to look for opportunities to improve outcomes for sepsis, which has a higher rate of readmission than heart failure," Mayr says.
"People who survive an initial episode of sepsis often don't do well. They return to the hospital frequently, accrue new health conditions, and have significantly elevated death rates."
The National Institutes of Health estimates that sepsis may occur in more than 1 million U.S. patients every year, and that between 28% to 50% of these patients do not survive. Patients who survive the condition often continue to suffer related health problems.
"Many people think infections and sepsis are short-term illnesses and that once patients are discharged from the hospital, they are better," said study senior author Sachin Yende, MD, associate professor in the Pitt School of Medicine and vice president of Critical Care at the VA Pittsburgh.
"But all research to date shows that sepsis has serious, lingering consequences, and patients continue to have problems well after they are discharged."
Mayr says the study provides "another building block" in the case for using sepsis as a quality measure. "Maybe it's time that we take it to the same level as pneumonia, heart attacks and heart failure and work on incentives that improve outcomes."
Americans living in rural areas are more likely than urban dwellers to die from preventable afflictions. A move by the Trump administration and Congress to consider block grant funding for Medicaid could threaten the means to address these rural health issues.
Two stories this month illustrate the dire needs and perilous status of healthcare delivery in rural America.
First, the Centers for Disease Control and Prevention has issued a new report that shows that many of the 46 million or so people living in rural America, roughly 15% of the population, are more likely than their urban counterparts to die from five preventable diseases.
According to CDC, potentially preventable deaths in 2014 included 25,000 from heart disease, 19,000 from cancer, 12,000 from unintentional injuries, 11,000 from chronic lower respiratory disease, and 4,000 from stroke.
The percentages of potentially preventable deaths were all higher in rural areas than in urban areas. The findings were detailed in a new rural health series in CDC's Morbidity and Mortality Weekly Report.
Furthermore, unintentional injury deaths were 50% higher in rural areas than in urban areas, due in part to motor vehicle crashes and opioid abuse. Making matters worse is the challenge of accessing trauma care and emergency medical services in remote, sparsely populated areas.
"This new study shows there is a striking gap in health between rural and urban Americans," said CDC Director Tom Frieden, MD, in commentary accompanying the report. "To close this gap, we are working to better understand and address the health threats that put rural Americans at increased risk of early death."
None of this is surprising. This column has written extensively over the years about the special health needs for rural Americans and the challenges of delivering coordinated, effective care to these underserved areas.
Numbers of studies and population data have shown us that people living in rural areas generally tend to be older, sicker, poorer, less likely to have health insurance, and have less access to care than their urban counterparts. In addition, they are more likely to use tobacco, more likely to be obese, and more likely to have the health issues associated with overweight, including high blood pressure.
A Call for Block Grants
The grim CDC findings were released amid reports that the Trump Administration and Republicans in Congress will attempt to shift Medicaid to a block-funding program.
It's expected that such a shift would mean considerable cuts to federal match funding for Medicaid, which President Trump pledged he would oppose during the campaign. Proponents say that block grants reduce fraud and waste and give states more flexibility to fashion Medicaid programs that fit their needs.
Skeptics remain concerned, however, that the block grant proposal is a ruse designed to shift costs to states.
"While we strongly support maintaining and increasing flexibility for states proposals that suggest states be provided with more flexibility and control must not result in substantial and destabilizing cost shift to states," Massachusetts Republican Gov. Charlie Baker said in a Jan. 11 letter to Congress.
"We are very concerned that a shift to block grants or per capita caps for Medicaid would remove flexibility from states as the result of reduced federal funding," Baker wrote. "States would most likely make decisions based mainly on fiscal reasons rather than the healthcare needs of vulnerable populations and the stability of the insurance market."
Baker suggested in his letter that every state's current federal/state share for Medicaid, which can range from 80/20 to 50/50, serve as a baseline for any reforms.
Be Afraid
Count me among the skeptics.
States already have flexibility to create Medicaid waiver programs, as Gov. Baker and former Indiana Republican Gov. Mike Pence, now the vice president, can attest. Block grants provide political cover in the name of states' rights and flexibility, when their real purpose is to reduce federal expenditures, which Congress will need to offset the loss of revenue from proposed tax cuts.
The Trump Administration and Congress have already begun dismantling the Affordable Care Act with no alternative plan in place, which would dramatically reduce the numbers of Medicaid enrollees.
Now they want to radically refashion the federal funding mechanism for Medicaid, which very likely will reduce funding, and impede access to healthcare that rural Americans so desperately need.
A Cleveland Clinic study finds that patient advocacy groups often receive funding from for-profit industry, raising questions about independence and conflicts of interest.
In the name of transparency, Sunshine Laws have required physicians, academic medical centers and other providers to disclose funding from for-profit companies. Non-profit patient advocacy groups have been ignored.
A national survey of 439 patient advocacy groups, led by Cleveland Clinic bioethicist Susannah Rose, PhD, found that 67% receive funding from for-profit companies, with 12% receiving over half of their funding from industry. The research was published in the Jan. 17 issue of theJournal of the American Medical Association Internal Medicine.
Rose spoke with HealthLeaders Media about her findings. The following is a lightly edited transcript.
HLM: What prompted this study?
Rose: There were to things that came together for me. I worked with cancer patients at Sloan Kettering for about a decade as a social worker. I linked up with hundreds if not thousands of patients with these advocacy organizations for education, counseling and a lot of things.
When I started to do more research on conflicts of interest when I went to Harvard, I realized there were a lot more investigations related to industry funding of clinical and medical research and physicians and academic medical centers, but I didn't find anything related to patient advocacy groups, despite their powerful role in the biomedical realms of policy making, research, and direct patient care.
HLM: Why have PAGs received no scrutiny?
Rose: In the last decade there has been attention from the media who have looked into these issues more on a case-by-case basis. To my knowledge, before this there were no systematic, scientific, published studies looking at this in the United States.
I think a lot of people just assumed that these non-profit advocacy groups are independent and aren't aware of their industry funding.
HLM: Are for-profit companies using PAGs to exploit the public trust that these groups hold?
Rose: I can't speak on the industry perspective because we didn't look at in this study. However, you can find them quite easily. There are reports published in the marketing literature written by industry representatives who use that approach.
HLM: Relatively speaking, it's not a lot of money, but it seems like PAG funding provides lot of bang for the buck.
Rose: That's right. There are a couple of surprising things about this to me. Two-thirds of patient advocacy groups have industry money. The second issue is that on average, the amounts are not overwhelming in terms of the median amounts.
However, if you look at subgroups, for example [you'll see that] 12% receive over half of their funding from industry. If you are worried about the independence of these organizations, you might be worried about their dependence on certain funding sources.
Receiving more than half of one's funding from industry may be a concern for questioning an organization's independence.
HLM: Has this reliance on industry money been used improperly?
Rose: Our paper doesn't disclose names because of confidentiality. We did include three citations in the discussion section of the paper that focused on the American Diabetes Association, the National Alliance of Mental Illness, and the American Pain Foundation, using journalists who looked at, for example, the American Diabetes Association and their role with Cadbury and other food companies and putting their logo on sugary snacks, things that may not be so good for people with diabetes.
Another concern is the mental health and pain groups that testify in Food and Drug Administration committees in support of approvals for certain medications, but they receive funding from that exact company that makes the medication, and that isn't being disclosed.
There is also the issue of looking for coverage for insurance companies, Medicare and private insurers, to cover very expensive but maybe even potentially harmful medications to certain populations. NAMI in particular was involved in the controversy over the black box warnings with SSRIs and their use in adolescents.
HLM: Should PAGs have uniform disclosure requirements?
Rose: I think so. In terms of disclosure, the only and best way to do this is to set a standard that all of them must meet, for instance, including in the Sunshine Act that currently reports industry funding to all physicians and academic medical centers and some other medical entities.
The Institute of Medicine actually suggested that quite a long time ago in their report on conflict of interests, but the Sunshine Act excluded patient advocacy groups from this legislation.
Industry groups are unlikely to be motivated to do this on their own because, if one organization does it and another one doesn't, it diminishes the returns on being transparent.
The policy advancements on this would be to make standardizations across all nonprofits, including patient advocacy groups.
HLM: Who would do this?
Rose: Congress. They could amend the Sunshine Act, especially as we are not talking about revisions to the Affordable Care Act. It may or may not be possible now given the current political environment. On the other hand, the ACA is open for a lot of potential changes and the Sunshine Act is a provision under the ACA.
HLM: Your study suggests that PAGs would welcome more transparency.
Rose: They would like to learn how to strengthen their policies. These advocacy groups do great things. They drive research. They raise awareness to important issues that maybe nobody would be paying attention to.
They have to get money from somewhere, and industry funding is a main source of income. The question is how can we help them be transparent, and how can they maintain their independence? Because, if they lose public trust, then I worry that we lose a major voice for patients in the public arena.
State and federal officials in the Keystone State this month unveiled the Pennsylvania Rural Health Model. The question to be answered is whether a predictable, fixed funding source will provide sufficient stability to financially stressed rural hospitals.
Pennsylvania has become the latest state to take action to address the plight of rural healthcare.
Gov. Tom Wolf and state and federal stakeholders this month unveiled the Pennsylvania Rural Health Model, a comprehensive, statewide pilot project to improve access to care delivery and population health outcomes.
Under the seven-year pilot project, which went into effect last week and ends in December, 2023, as many as 30 rural critical access and acute care hospitals across the state that opt in will be paid a fixed all-payer global budget that is set in advance for inpatient and outpatient services.
They will also receive monthly Medicare fee-for-service payments and payments from commercial plans.
The Pennsylvania model is the latest in a string of innovative all-payer pilot projects designed by states with the support of the Centers for Medicare & Medicaid Services.
In 2014, Maryland launched an all-payer model that transitions to global payments rewarding value over volume. Last October, Vermont unveiled an all-payer accountable care organization model. CMS has designated Pennsylvania as a Round 2 Design State that could serve as a model for other states considering an all-payer project.
The question to be answered in this pilot program is whether this predictable, fixed funding source will provide sufficient stability to financially stressed rural hospitals that will allow them to transition into a value-based care delivery model designed to meet the specific needs of the communities they serve.
Jeffrey Bechtel, senior vice president for health economics and policy at the Pennsylvania Hospital & Health System Association, calls the model "a paradigm shift, and a move away from fee-for-service with the benefit of a predictable budget."
"The thought here is to transform the way that hospitals operate," he says.
"Rather than being on the hamster wheel of fee-for-service, they will have a predictable budget. They will be required to submit a transformation plan that will allow them to redesign their care delivery to focus on outpatient services and eliminate subscale inpatient services and ultimately share in the value creation."
CMS has provided $25 million in seed money that will be used for data analytics, quality assurance, and technical assistance. CMS and Pennsylvania policymakers will also help local hospitals fashion care models that address the specific needs of their service area.
These innovative programs that empower states to identify and address their specific healthcare needs have been coordinated through the CMS Innovation Center, a creation of the Affordable Care Act, which Congress and the Trump Administration have vowed to repeal. (The nonpartisan Congressional Budget Office this week provides a chilling report on the likely fallout.)
Gov. Wolf and Stephen Cha, MD, director of state innovations at the CMS Innovation Center, said at a media availability last week that the Pennsylvania model will survive even if Congress repeals the ACA.
"The agreement being signed today for this partnership is being signed by the state of Pennsylvania and the federal government, not an administration. We intend to uphold that agreement," Cha said.
"Our excitement about entering into this partnership is predicated on the strength in the model and our belief that this is the right pathway to travel for rural areas all across the country."
Wolf said the Pennsylvania model could provide a road map for improving care access across rural America. "Whether the new administration agrees with the current administration that Pennsylvania or this particular program is right, we are doing something that really transcends any one administration."
This pilot program isn't about just promoting population health. It's about improving the financial health of hospitals and the economic stimulus they spark in rural Pennsylvania.
Hospitals 'Essential' to PA Communities
"About half of Pennsylvania's hospitals lose money on patient care," Bechtel says. "One-in-three have negative total margins. Thirty percent of Pennsylvania's rural hospitals have negative three-year average total margins, and rural hospitals across the Commonwealth have observed declining margins of approximately 5% per year since 2011."
To address this worsening financial climate, hospitals have had to cut back on services. Since 2000, for example, one-third of hospitals in the state have closed their OB units.
About 70% of Pennsylvania is rural, and 20% of the population lives in rural areas. Bechtel says rural hospitals provide access to care for about 1.8 million Pennsylvanians.
In two-thirds of Pennsylvania's designated 48 rural counties, hospitals are among the top five employers. In 14 of the counties, hospitals are the largest employer.
"Not only are these rural hospitals the primary source of care access for their service area, they are often a critical economic driver for the region," Bechtel says.
"Rural hospitals support nearly 50,000 family-sustaining jobs across rural Pennsylvania. That is 27,200 through direct employment plus another 20,300 created in local economies through the economic stimulus of rural hospital spending. The bottom line is that hospitals are essential to their communities."
Standard & Poor's says the outlook for the not-for-profit healthcare sector will be stable in 2017, but the forecast comes loaded with caveats.
The uncertain future of the Affordable Care Act, Medicare and Medicaid is making bond rating agencies anxious.
Standard & Poor's Global Ratings has extended its stable outlook for the not-for-profit healthcare sector in 2017, but not without trepidation.
"This is one of the more difficult decisions we've made," Kevin Halloran, senior director at Standard & Poor's Global Ratings, said in a recent media conference call.
"Everything we look at from a numbers standpoint almost demands a 'stable,' and yet there is a sense in the pit of your belly that maybe the sector isn't as stable as the numbers might indicate," he says.
"We are about to experience a shift in administrations and Congress and some of those changes could be very large and very impactful to the sector and could happen very quickly."
Health systems continue to do better than stand-alone hospitals.
"That's one leading indicator that if you are a little bit smaller, you're a little bit more constrained and you might not succeed going forward," Halloran says. "And secondly, the fairly robust pace of upgrades to downgrades that we saw in '16 appears to be slowing a little."
"As we look forward, it's our belief that the sector has peaked," he says.
"The ACA and its impact along with what hospitals and health systems were going to constrain expenses all came together in 2015. We saw volumes go up. We saw payer mixes improve. We saw upgrades outpacing downgrades, and that really flowed through 2016."
The first three quarters of 2016 were a positive trend with respect to upgrades, but that flat-lined in the fourth quarter, with 11 upgrades and 11 downgrades.
"One quarter does not a trend make," he says. "There was a lot of robust activity in 2015 and it bled into early 2016."
Weakness Coming?
"It appears that this is one of those data points that is starting to say 'there could be some weakness coming in the sector.' It backs up our opinion that we think the sector has peaked from a numeric standpoint. It's hard to hang your hat on these two data points: systems doing better than stand-alones, [and] fourth-quarter results with an even split in upgrades and downgrades. But it is factoring into our thinking."
Martin Arrick, managing director of S&P's Global Ratings' not-for-profit healthcare portfolio, says "healthcare has never been more complicated than it is now" in large part because of the potential for radical change with the repeal of the Affordable Care Act, and major overhauls to Medicare and Medicaid.
"There now is this huge overlay of legislative risk," he says. "We're concerned, and obviously we are going to monitor it fairly closely. It could be traumatic and it's unclear how quickly it could happen."
ACA Equivalent Unlikely
Arrick says it's hard to speculate on what would replace the ACA, because neither the Trump Administration nor Congress have offered any details.
"Obviously, everybody in the field is like 'OK, you've got to replace it with something that creates the same amount of healthcare for the same amount of people,' and I guess we're all feeling that is very unrealistic in terms of expectations," he says. "If it was easy it would have been done already."
Arrick says it's likely that the ACA will be repealed without an equivalent plan in place.
"Our expectations from a credit quality perspective is that there will be huge revenue losses for hospitals and healthcare systems, and in theory there will be some expense reductions because fewer people will be accessing the system as frequently as they are now. That could be a plus or a minus. Our sense is it's likely to be a minus."
With Medicaid expansion, for example, the numbers of uninsured went down and the numbers of insured went up, both of which were credit positives for hospitals and health systems expansion states. It's likely those positive trends could be reversed if Medicaid is swapped out for a block grant program, as some in Congress have proposed.
"That may be revenue-neutral on Day One," Arrick says. "Over time, as medical inflation rises and it's historically always been rising faster than consumer price inflation, our expectation is that some sort of block grant program would not truly capture the increase in costs, and it's like a yearly inflator that fails to keep up over time. It would worsen Medicaid reimbursements."
Block Grants Concerning
Beyond that, Arrick noted that Medicaid is a counter-cyclical program. When states are in recession, Medicaid rolls tend to increase, more federal money comes into the states through the Medicaid program and it has a counter-cyclical impact on the economy.
"With a block grant situation, while we haven't seen the legislation, we have a concern that that mechanism would no longer function as effectively as it does now," Arrick says.
With respect to the proposed Medicare premium support programs, Arrick says the expectation is that vouchers will push more and more costs onto elderly Medicare enrollees.
"I don't know how that would work for providers," he says. "Our expectation is that over time that will contribute to weaker revenues and weaker performance at the provider level."
The Healthcare Leadership Council outlines steps to stabilize the health insurance market, intensify the fight against chronic disease, and accelerate health data interoperability.
The Healthcare Leadership Council has provided a policy agenda for 2017 to the incoming 115th Congress and the Trump administration and urged them to embrace "the opportunity to continue and accelerate the profound transformation of our healthcare system to benefit all Americans."
HLC describes itself as a coalition of chief executives from hospitals, health plans, pharmaceutical companies, device manufacturers, and other segments of the healthcare industry.
"All Americans deserve better healthcare," the letter says. "Fortunately, there is consensus around what "better" means: lower costs, higher quality, greater efficiency, and an improved experience for patients and their families," HLC said in an executive summary.
"A new presidential administration and Congress have the opportunity to make real progress toward achieving that vision, and there are several things we can do right now—quick fixes that build on the successes of the recent past and the robust spirit of innovation seen in every sector of healthcare. There's no need for 30 more years of debate! These actions are achievable and transformative."
The policy recommendations include:
Increasing investments in comprehensive, evidence-based wellness practices that will reduce healthcare costs and improve quality of life.
Achieving system-wide health information interoperability by Dec. 31, 2018.
Reforming the federal fraud and abuse legal framework to enable multi-sector collaborations that will strengthen value-based healthcare efforts.
Strengthening the healthcare workforce by expanding interstate licensure, allowing healthcare professionals to practice to the full extent of their training, and increasing federal funding for graduate medical education.
Taking action to expand the use of telehealth in all accountable care models, managed care, Medicare Advantage, and fee-for-service plans.
Harmonizing federal and state patient privacy laws and regulations to enable the interstate flow of healthcare data.
HLC also recommended a series of near-term actions to stabilize and improve the non-group health insurance market. These include greater flexibility for health plans to design affordable products, creation of platforms that will enable health insurance consumers to compare coverage plans the way they do other consumer goods, curtailing special enrollment periods that contribute to market instability, and granting states the flexibility to establish network adequacy standards.
Federation of State Medical Boards says it's ready to work with the new administration on medical license portability and better state-federal coordination to curb opioid abuse.
Improving medical license portability, removing barriers to telemedicine, and better state-federal coordination in battling opioid abuse are among the top priorities identified by the Federation of State Medical Boards in a letter this week to President-elect Donald Trump.
The FSMB is ready to work with the incoming administration "to ensure that state medical boards continue to play a central role in shaping the future of medical regulation by protecting the public and promoting quality healthcare in the United States," FSMB President/CEO President Humayun J. Chaudhry, DO, said in the letter.
The federation, a non-profit organization comprising 70 state medical and osteopathic licensing and disciplinary boards in the U.S. and its territories, identified four areas that it hopes to act on with the cooperation of the Trump Administration. They are:
Encouraging the work by states to support medical license portability by enacting the Interstate Medical Licensure Compact, which expedites physician licensure that expands access to healthcare, especially in rural and underserved communities.
Strengthening a shared commitment to remove barriers and accelerate access to telemedicine services, especially for military personnel and veterans, in a safe and accountable manner.
Continuing to work with the Centers for Disease Control and Prevention, Drug Enforcement Administration, Food and Drug Administration, Office of National Drug Control Policy, and the Substance Abuse and Mental Health Services Administration to combat opioids abuse, while also balancing access for patients with legitimate needs.
Acknowledging the value of state medical boards in protecting the public and expressing concern about federal interference with states' medical regulatory autonomy.
"The FSMB welcomes the opportunity to work with your Administration on these priorities, as well as initiatives focused on promoting quality health care in the United States," Chaudhry wrote.
