One of the first community paramedic programs is proving that providing in-home, non-emergency care makes sense on many levels, and that it is as "economically viable as another system of care," says the agency's chief of clinical services.
It's been three years since last I wrote about community paramedics. Given the relentless grey tsunami of aging Baby Boomers and the dwindling supply of healthcare providers, especially in rural areas, it's time to circle back and re-examine the program.
The idea is less than 10 years old, but already there are more than 500 community paramedic programs across the United States, says Christopher A. Montera, chief of clinical services at Eagle County Paramedic Services, in Vail, CO. ECPS started its community paramedic program in 2010 as one of the first rural programs in the nation.
"It's going to continue to grow," Montera says. "When we started this, there were no states that had community paramedic legislation and today there are 17 states. More than one-quarter of the states have some sort of legislation for this, and there are another 12 getting ready to come on line in the next few years."
Using paramedics during their down time for in-home, non-emergency care makes sense on many levels.
"We started looking at what we could do as paramedics aren't always responding to calls every day," says Montera. "We thought why don't we use an untapped resource in the community to see patients who are falling through the gaps, or they are homebound and can't see their physicians, but they don't qualify for home care? Here we have a shortage of homecare nurses. It was a no-brainer for us that we see patients."
At ECPS, the care coordination is clinician-driven, and paramedics only visit a patient in their home after a referral. Often, the patients are elderly; about 80% are on Medicare or Medicaid, and many are frequent users of ambulance or ER services.
"We've created a simple form that can be used by any provider in our community, whether they be a nurse, physician or whatever," he says. "They fill out the patient's demographic information, what the patient needs, and they fax it to our office. The patient often doesn't self-identify. The patient is identified by other resources in the community who believe the patient might have an unmet health or social need."
In making the house calls, paramedics are trained to assess potential health threats in the home, including issues with utilities, lack of food, etc.
"The patients, when they go to see their physicians, are typically in their Sunday best. The physician has no idea what the living environment is like in the home," Montera says. "Part of our job is to be the eyes and the ears of the physician in the home. We also can run a myriad of lab test at the patient's home and give those results directly to the physician."
A Self-Funded Money-Saver
ECPS receives no funding for its community paramedic program because the state of Colorado hasn't passed legislation setting up a framework. Montera says the program costs about $110,000 per year. That expense mainly covers the salary of the 1.2 FTEs and an SUV. The program operates four days a week during the day, when the paramedics are not involved in their primary emergency response duties.
Montera says a cost-savings analysis done in 2012 showed that the program saved about $135,000 that year.
"We've proven it works and that it can be [as] economically viable as another system of care," he says. "A lot of it is keeping patients out of long-term care, or keeping them out of the emergency room and getting transported by ambulance, and keeping patients out of areas where they didn't receive unnecessary care."
The ECPS community paramedics see about 200 patients per year, spending on average about one hour in the home. Montera says considerably more time can be spent after the visit helping patients find access to care.
"In fact, last week our community paramedic spent more than 50 hours with one patient trying to place her in the right system of care," he says. "It's not just the one-hour visit, it's all the things that surround that patient's care and the coordination of the care that are as important as the visit itself."
Couldn't a nurse from a federally qualified health center or a county health service do the same thing?
"It is harder to recruit nurses to do this type of work," Montera says. "In our community we have a home care agency that doesn't have the staffing to see patients. We have continual problems with that. We have a federally qualified health center in our community and we partner with them to see these patients."
Filling a Gap
"The other part of it is paramedics are already engaged with the community," he says. "That leap of trust isn't that wide when someone thinks there is a paramedic coming to my home. It doesn't seem as intimidating as having a nurse come in. Also, we are already mobile. It is harder for systems that weren't traditionally mobile to ramp up to mobility. We already have the infrastructure to provide care in a home."
"And frankly, paramedics are not nurses and we are not trying to replace home care nursing, but there are so many patients who don't qualify for home care that we can fill that gap," he says. "It is filling that gap for sub-acute, semi-chronic patients that we can see over several visits and help solve some of their care issues."
Interest in community paramedics has been so strong that ECPS created a free manual to help other communities start their own programs.
"We get calls about five to six times a week asking how to start up. That is why we created the resources, so we could say 'read this and talk to me,'" Montera says.
So how do you start a community paramedic program?
"The first step is community engagement. The community really has to know what you are trying to do, and you have to know what is available in the community," Montera says.
"Secondly you have to have the commitment of a medical director or physician advocate who wants to see change," he says. "If you don't have that in your community, you should consider going to community or county leaders and convince them of the economic benefit of having a healthy population."
"Third, you need the support of the people who run the paramedic system," he says. "It's a little scary to try something new and change your method of operation. You have to be willing to risk a little bit to see some success and to invest in that success before you see it come to fruition."
And finally, everyone in the local care community has to be involved.
"It can't just be the paramedic system saying 'we are going to do this' and then operate in a silo," Montera says. "This program is all about breaking down silos."
Family physicians generate $1.4 million in revenues for their hospitals, about 7.5 times the value of their compensation. Orthopedic surgeons bring in 5.5 times the revenue value of their compensation, data shows.
Physician specialists continue to generate the most money for their hospitals, but primary care doctors still provide more bang for the buck, a Merritt Hawkins survey released this week shows.
Orthopedic surgeons were paid $497,000 on average in 2015 and generated about $2.7 million in revenues for their hospitals, which is about 5.5 times the value of their compensation. Family physicians with an average starting salary of $198,000 in 2015 generated $1.4 million in revenues for their hospitals, which is about 7.5 times the value of their compensation, the survey reported.
A further breakdown showed that an invasive cardiologist and a neurosurgeon each generated about $2.44 million, and a general surgeon generated about $2.1 million. Family physicians generate an average of $1.5 million in net revenue annually for their affiliated hospitals, while general internists generate $1.8 million.
The average $1.56 million revenue for all medical specialties included in the survey is up from $1.44 million in 2013, the last year Merritt Hawkins conducted the survey. Revenue generated by 11 of the 18 medical specialties increased in 2015 when compared to 2013.
Irving, TX-based Merritt Hawkins, one of the nation's largest physician recruiting firms, compiled the data in a survey of hospital CFOs. The figures include both net inpatient and outpatient revenue from patient referrals, tests, prescriptions, and procedures performed or ordered in the hospital.
Travis Singleton, a senior vice president at Merritt Hawkins, says the fact that inpatient/ outpatient revenues in 2015 were up from the 2013 survey "is pretty telling," and in sharp contrast to the nationwide push for preventative medicine and reduced utilization.
"It is counter to a lot of the rhetoric you hear in healthcare. Net inpatient/outpatient numbers should be declining at a huge rate, and the reality is they didn't. They went up," Singleton says. "That shows that doctors remain the engine of our healthcare economics. There are no two ways about it. The fundamentals of our economics in healthcare have not changed and people need to understand that."
"That doesn't mean we aren't taking steps in the right direction around preventative care. Our continuum of care is the best it's ever been and really trying to curb readmissions. We have done an admirable job," he says.
"What this shows you is that the overall volume is overwhelming the system, even though we have done well in those areas. The overall inpatient/outpatient revenue per physician has gone up and that's because you cannot prevent your way to immortality"
"We are looking at volumes in hospitals that we have never seen before. Specifically, if you look at the numbers around specialists, that is the most telling," he says. "With the rate that Baby Boomers are hitting our systems, it would have been foolish to think these numbers would go down no matter how great a job we're doing."
Specialists Top Compensation Lists
Orthopedists ($443,000), cardiologists ($410,000), and dermatologists ($381,000) are among the highest-compensated physicians in Medscape's Physician Compensation Report 2016, while pediatricians, ($204,000), endocrinologists ($206,000), and family physicians ($207,000) maintain a firm hold on the bottom rung of the compensation ladder that they've held for the past three years.
When compared with Medscape's 2015 survey, allergy and pulmonology saw a noticeable decrease in income (-11% and -5%, respectively). Pathologists and plastic surgeons remained stable. The rest of the physician specialities reported an increase.
The greatest increases appeared among rheumatologists and internists (12%), followed by nephrologists and dermatologists (11%).
The Medscape survey shows that self-employed specialists and primary care physicians make more money than their employed colleagues. Employed primary care physicians earn about $207,000, compared with self-employed peers who earn about $229,000.
That the gap is narrowing, however, as employed primary care physicians have seen the highest percentage compensation increase (10%) compared with self-employed PCPs (8%) and specialists (6%).
Spend It to Earn It
When it comes to physicians, hospitals are discovering the truth behind the axiom: You've got to spend money to make money. A report last December from Moody's Investors Service found that hospitals with very high physician employment generate stronger revenue growth, but are less profitable than peer institutions with fewer employed physicians.
"It's pretty simple. Physicians are very expensive to employ," says Daniel Steingart, vice president and senior analyst at the ratings agency.
Moody's found that the median operating cash flow margin is 10.7% for hospitals with low physician employment, compared to 8.5% for hospitals with very high physician employment.
Hospitals with very high physician employment saw a 6.8% three-year revenue compound annual growth rate, compared to 4.9% for hospitals with low physician employment. Hospitals with very high physician employment have a median operating revenue of $950 million, compared with $431 million for hospitals with low employment, and $673 million as the national medial. Hospitals with very high physician employment also report that outpatient revenues (54%) exceed inpatient revenues (46%), Moody's says.
An analysis of New York State Department of Health data identified 10 common low-acuity conditions. The estimated cost of the potentially avoidable ER visits is $1.3 billion, according to Excellus BlueCross BlueShield.
More than 2 million trips to hospital emergency departments in New York state costing $1.3 billion could have been avoided if patients had sought treatment for 10 low-acuity conditions in less-expensive care venues, according to an analysis by Excellus BlueCross BlueShield.
The Excellus study examined New York State Department of Health data on 6.4 million ED visits in 2013 and identified 10 common low-acuity conditions that were "potentially preventable" if the patient had sought treatment in a primary care physician's office, an urgent care center, or by using telemedicine.
Jamie Kerr, MD, medical director, Excellus BCBS, says the $1.3 billion cost was an extrapolation of Excellus BCBS upstate New York claims data from 39 counties. She says spending is probably higher because costs in the New York City area are higher.
The 10 common low-acuity conditions included bumps and bruises, joint aches, ear aches, headaches, sprains, strains, and sore throats. The $1.3 billion estimate was built on the assumption that each potentially preventable ER visits cost nearly eight times the cost of seeing a doctor, 3.5 times the cost of an urgent care center visit and about 15 times the cost of using telemedicine, which averages about $49.
Kerr says there's no simple answer for what is driving these potentially preventable ER visits, but it's not a new phenomenon. "The use of emergency rooms for low-acuity clinical problems has been going on for years. I don't want to imply that there is a sudden acute rise," she says.
"We have done some outreach in our communities and it is a combination of factors. One is that there are in some areas shortages of primary care physicians. The other is that clinical problems sometimes begin in the after-hours timeframe," she says.
"Physicians can't work 24/7. Some of it is access to primary care, but also access to primary care in the evenings and the weekends. Some of it is the fact that patients don't have a regular relationship with a primary care physician. Sometimes there is lack of knowledge that there are alternatives to an emergency room if you have a clinical problem and you recognize that you need to be seen and your doctor may not be available."
Mandatory Coverage for Telemedicine
Effective Jan. 1, health insurers in New York state were required to cover telemedicine visits by patients enrolled in their commercial products. "The telemedicine infrastructure is emerging, but it's not been fully adopted," Kerr says.
"We have a very mature healthcare delivery system and the challenge will be how do we incorporate telemedicine technologies into our current delivery systems and physician practices when applicable and what role will it play in the evaluation of what appear to be common primary care clinical problems that could be potentially handled through a virtual visit."
Kerr says many patients don't understand when and where urgent care and telemedicine services are available, but that payers and providers are working to address that.
"We've been working in partnership with a terrific group of physicians in upstate NY through the medical societies on educating patients about emergency rooms and low-acuity visits. We have a physician community that is actively engaged, and public awareness campaigns, and they have partnered around communicating with patients," she says.
"I would say there is more work for all of us to do. All of us have a role. Health plans, physicians, and patients have a role."
Hospitals serving a large volume of low income patients are 2.67 times more likely to be penalized for higher readmissions, America's Essential Hospitals' data shows.
Several studies in the past few years have added empirical data to the common sense notion that hospitals serving a poorer, sicker, older patient mix aren't necessarily providing inferior care, but are nonetheless penalized unfairly because they're caring for society's most vulnerable people.
That's exactly what's been happening for the past several years since the implementation of the Patient Protection and Affordable Care Act's Hospital Readmissions Reduction Program. The most recent round of readmissions penalties announced last fall imposed $420 million in penalties for nearly 2,600 hospitals.
A data brief from America's Essential Hospitals examined the HRRP and found that hospitals serving a large volume of low income patients are 2.67 times more likely to be penalized for higher readmissions. Further, hospitals that receive higher penalties as a percentage of their Medicare payments also showed the most improvement on readmissions between 2013 and 2016.
A study out this week in the Journal for Healthcare Quality used a new measure to examine more than 15 million discharge abstracts from 611 hospitals that accounted for socio-demographics in a hospital's inpatient population mix and allowed for evaluation of readmissions rates relative to national benchmarks.
Not surprisingly, the study found that while clinical conditions were the strongest predictors for readmissions, "factors such as age and accompanying comorbid conditions were also important. Socioeconomic factors, such as race, income, and payer status, also showed strong statistical significance in predicting readmissions."
For example, the study found that overall African-Americans were 10% more likely to be readmitted than whites. For all patients, regardless of race, the odds for readmissions were 24% higher for Medicare heart attack patients when compared with heart attack patients using commercial insurance.
That should be obvious, because Medicare patients are older, and likely have more health complications. Nonetheless, hospitals serving higher proportions of African-Americans and/or a Medicare patient mix get hit with more readmissions penalties for the very thing they cannot control—their patient mix.
Study co-author John Martin, vice president of research operations at Premier, Inc., says the study shows that risk-adjusted readmissions rates can be tracked in a dynamic database, and that payment models that use these comparisons could result in more equitable payments and improve transparency on socio-demographic disparities.
"We feel like at least including the socio-economic factors, you are going to improve the ability to predict readmissions outcomes, whereas if you leave them out you are losing some of that predictive capability," Martin says. "None of the readmission models that have come out to-date have a really hard predictive capability of some of the other quality measures, such as mortality.
Unintended Consequences of a Legitimate Concern
CMS has opposed using socio-economic and demographic measures for hospitals serving lower-income patients. They don't want to create an expectation that somehow lower-income patients should expect a lower level of care. That's a legitimate concern, but the unintended consequences of the HRPP have hurt most the hospitals that are serving these vulnerable populations.
"We're not advocating an inferior or superior standard," Martin says. "We are saying there are measures for quality and there are measures for payment. The problem comes in with the payment related to that. Yes, we don't want to marginalize any segment of the population in the quality measurement, but if you are simply going to use the measure for paying the hospital you don't want to penalize a hospital that is treating patients who are going to be much sicker than others. We want to make sure that if we are going to use the payment penalty, that it is not going to take away from the hospitals that need the money more than other hospitals."
The bill's sponsors say it will "help ensure that the program does not disproportionately penalize certain at-risk communities and exert additional financial burdens to already stressed local healthcare systems."
Unfortunately, there is no telling what will happen to this bill during a presidential election year, or when or if this do-nothing Congress will act on it. Hospitals that are relying upon the swift action of Congress to stay afloat should start lowering the lifeboats.
The latest spate of round of mergers and acquisitions includes announcements from Sanford Health, Community Health Systems, the Westchester Medical Center Health Network, and Tenet.
Barnabas Health and Robert Wood Johnson Health System have finalized the previously announced merger of their two health systems to form what they're calling "the most comprehensive health system in the state of New Jersey."
Financial terms were not disclosed.
The renamed RWJBarnabas Health is now the biggest health system in the state of New Jersey, with 11 acute care hospitals, three pediatric acute care hospitals and a pediatric rehab hospital, a freestanding 100-bed behavioral health center, and outpatient and ambulatory care centers scattered throughout the region, a medical group, and four accountable care organizations.
The health system is expected to reach about 5 million people, more than half the population of the state. Combined, they will have $4.5 billion in revenues, 260,000 inpatient admissions, 2 million outpatient visits, nearly 700,000 emergency department visits, 23,000 births, according to media reports.
RWJBarnabas Health also becomes New Jersey's second largest private employer, with more than 32,000 employees and 9,000 physicians. It will train more than 1,000 residents and interns annually.
Barnabas Health President/CEO Barry H. Ostrowsky becomes RWJBarnabas Health's president/CEO. Former Robert Wood Johnson Health System and Robert Wood Johnson University Hospital President/CEO Stephen K. Jones becomes Chief Academic Officer in the Office of the President.
"By joining together, we have created the most comprehensive health system in the state, which will enable us to effect the kind of change in the health of our communities that our two separate systems could not do alone," Ostrowsky said in prepared remarks. "Our partnership also means a greater level of diversity in every respect—diversity in thought, clinical care delivery and workforce—a true reflection of New Jersey and of the people we serve."
Under the agreement, the two health systems have implemented a member substitution, creating a new organization based in West Orange. RWJBarnabas Health is being led by a single board of trustees and a single leadership team composed of executives from both organizations.
The new board includes equal board representation from Barnabas Health and Robert Wood Johnson Health System, as well as the CEOs of both organizations.
HealthAlliance (NY) Joins WMC Health Network
Kingston, NY-based HealthAlliance of the Hudson Valley has joined the Westchester Medical Center Health Network. The affiliation gives HealthAlliance greater access to WMC's physician network and purchasing power, the two health systems said in a media release.
"We couldn't be happier with the relationship," said David Scarpino, president/CEO, HealthAlliance. "It ensures that our community will receive the highest-quality healthcare, locally, now and well into the future. The agreement strengthens HealthAlliance's existing healthcare offerings while providing new and more advanced services to meet a full range of patient needs."
Under the affiliation, Scarpino says Health Alliance will continue to provide critical access and skilled nursing services in the Margaretville area while building a "medical village" of ambulatory services at its Broadway Campus.
WMC Health already partners with MidHudson Regional Hospital in Poughkeepsie and Bon Secours Charity Health System, which has hospitals in Suffern, Warwick and Port Jervis.
"HealthAlliance has been — and now will continue to be — a conduit for high-quality care for Ulster and Delaware County residents," WMC Health CEO/President Michael D. Israel said in prepared remarks. "WMCHealth will play an integral role in ensuring the continuation and enhancement of these services."
Under the affiliation, which was finalized on Thursday, WMCHealth will be the sole corporate member of HealthAlliance and will oversee its hospital operations, as well as operations at other HealthAlliance facilities.
WMCHealth is a 1,900-bed healthcare system headquartered in Valhalla, NY, with 10 hospitals on seven campuses spanning 6,200 square miles of the Hudson Valley. WMCHealth employs more than 12,000 people and has nearly 3,000 attending physicians.
Sanford Health Buys Tracy (MN) Medical Center
Sanford Health has purchased Sanford Tracy Medical Center, a 25-bed hospital that was operated by Sanford Health, but owned by the City of Tracy. Financial terms were not disclosed for the sale, which was finalized on March 31.
Sanford Mayor Steve Ferrazzano called the deal "a win-win situation for our town."
"We'll retain quality healthcare close to home, and the city will no longer have the financial responsibilities that come with owning a healthcare facility. This frees up taxpayer dollars for other projects," Ferrazzano said in prepared remarks.
Under the agreement, Sanford will own the medical center buildings and grounds. Employees of Sanford Tracy Medical Center will not see any changes as they were already employed by the health system.
Sanford Tracy Medical Center CEO Stacy Barstad promised "a seamless transition for our patients and employees." The medical center includes the general, surgical hospital, a clinic, and outpatient medical specialty services.
Sanford Health, headquartered in Fargo, ND, and Sioux Falls, SD, is one of the largest health systems in the country, with 43 hospitals and nearly 250 clinics in nine states.
Tenet Finalizes $575M Sale of 5 Atlanta-area Hospitals
Tenet Healthcare Corporation has completed the sale of its five Atlanta-area hospitals and related operations to WellStar Health System in exchange for $575 million in cash, effective March 31, the Dallas-based company announced.
As part of the deal, Tenet will retain some net working capital accounts and WellStar will assume certain capital leases related to the operation of the acquired facilities.
Tenet and WellStar announced the deal on Dec. 1, 2015, which includes Atlanta Medical Center and its South Campus, North Fulton Hospital, Spalding Regional Hospital, Sylvan Grove Hospital and 26 physician clinics.
With the deal finalized, Tenet no longer operates in the state of Georgia. In a conference call with analysts last May, Tenet CEO Trevor Fetter explained the exodus.
"There are markets where we don't see a path either by acquisition or partnership to develop the scale we believe will be necessary as healthcare delivery continues to evolve. In those markets, we believe our hospitals would be better positioned under another operator," he said.
"For example, we continue to pursue strategic alternatives for our hospitals in Georgia and North Carolina and expect this process will likely result in sales of these facilities."
CHS Acquires Fayetteville, AR Hospital
Community Health Systems, Inc. has acquired an 80% ownership interest in 20-bed Physicians' Specialty Hospital in Fayetteville, AR. Financial terms were not disclosed.
The hospital is located in the Arkansas region served by Northwest Health, a CHS-affiliated network with three hospitals, four convenient care centers and associated outpatient clinics.
"The addition of Physicians' Specialty Hospital in Fayetteville deepens our network of facilities in northwest Arkansas, one of the fastest-growing markets in the U.S.," CHS CEO Wayne T. Smith said in prepared remarks. "The physicians and providers of this hospital have established a strong reputation for quality care, and we look forward to working with them as we coordinate and strengthen clinical services for the region."
Franklin, TN-based CHS owns, leases or operates 198 affiliated hospitals in 29 states with an aggregate of approximately 30,000 licensed beds.
The company has announced plans for a spin-off transaction to create a new, publicly traded company, Quorum Health Corporation, with 38 affiliated hospitals and related outpatient services in 16 states. The transaction is expected to close during the first half of 2016.
For a real-world example of why aggressive implementation of telemedicine is needed, look to Alaska, where barriers to access are poised to come down, reflecting a nationwide trend.
We’ve known and talked about the physician and nursing shortage in this country for years.
Baby Boomer-aged healthcare providers are retiring along with millions of their contemporaries, creating huge gaps in care access that are occurring just as the Patient Protection and Affordable Care Act expands healthcare coverage to millions of Americans.
This change is manifest along several fronts. If you want a real-world example of why aggressive implementation of telemedicine is needed, for example, look to Alaska. If ever a landscape exemplified the need for remote access to healthcare, it’s Alaska.
The ratios aren’t that bad. There is one physician for every 247 Alaskans, with puts Alaska in the middle of the pack among states. However, Alaska’s physicians have lot more ground to cover. By far the nation’s largest, most rural state, only one-third of Alaska is accessible by road.
The state has five time zones (although only two are used), and is home to 737,000 people, roughly 9.5% of whom are age 65 or older. That’s 1.2 people per square mile, spread across 663,267 square miles, more than twice the size of Texas, and three times the size of California.
By comparison, Connecticut has 332 physicians per 100,000 population, which is 3.6 million residents spread across 5,544 square miles, or about 738 people per square mile, according to U.S. Census Bureau data.
All of this is a round-about way of noting that telemedicine is not some abstract notion in Alaska. It is critical to the health of the people, many of whom have few options for access to healthcare even as the state it remains in the middle of the pack among states in a recent ranking by the American Telemedicine Association.
Motivated by the need to improve care access, the state’s legislature wants to improve on that middling ranking with a bill that would allow licensed Alaska physicians located out-of-state to provide telemedicine services with the same privileges as in-state physicians. The bill has the conditional support of the Alaska State Medical Association. Last week the Federal Trade Commission offered its support after it was asked to review the proposal by State Rep. Steve Thompson, co-chair of the Alaska House Finance Committee.
“By eliminating the ‘in-state’ requirement, SB 74 would likely expand the supply of telemedicine providers, promote competition, and increase access to safe and cost-effective care. It could also reduce transportation costs for Alaska patients and providers,” the FTC comment states. “For these reasons, the elimination of the ‘in-state’ requirement by SB 74 appears to be a procompetitive improvement in the law that would benefit Alaska healthcare consumers, including its most vulnerable populations.”
It speaks volumes when the FTC wades into an issue such as this and makes plain the benefits of removing stifling regulations instead of adding more.
It’s part of a larger trend surrounding care access that is driven by stark and undeniable necessity. Barriers are coming down, not just in Alaska, but across the nation. For the past several years nurses in states across the nation have made tremendous progressing improving their scope of practice, often in the face of stiff resistance from physicians associations.
In Florida, for example, the state’s legislature this month sent to Gov. Rick Scott two bills that are expected to improve access to care in the Sunshine State. One bill lets Florida enter a multistate nurse licensure compact that would allow nurses from other states to practice in Florida. A separate bill allows physician assistants and nurse practitioners to prescribe controlled substances, something the Florida Nurses Association has sought for more than 20 years.
In years past the Florida Medical Association has generally opposed scope-of-practice bills that they perceive as stripping authority from physicians as care team leaders. However, in this case they backed off their opposition when it became clear that the legislature was backing the nurses, who’d made a strong case for improving care access. In exchange, the physicians negotiated new language simplifying prior authorization forms with payers.
The moral of the Florida story is that special interests that once tried to limit scope of practice to protect their market share now understand that their biggest opponent is demographics. The better course would be to understand the inevitable and cut the best deal you can negotiate. As the old saying goes, if you’re not at the table you’re on the menu.
Researchers find that "cross-market mergers in the same state result in price increases of roughly 6% to 10%, while those linking hospitals to out-of-state providers do not result in statistically meaningful changes in price.
A study out this month from researchers at Northwestern University's Kellogg School of Management provides a link between "cross-market" hospital mergers and higher prices for healthcare.
Specifically, researchers examining more than 500 hospital mergers from 2002 to 2012 found "cross-market mergers in the same state result in price increases of roughly 6% to 10%, while those linking hospitals to out-of-state providers do not result in statistically meaningful changes in price. Further analyses provide suggestive evidence that mergers of proximate hospitals (i.e. within 30−90 minutes' drive, in state) lead to the largest price effects."
Dafny: There were consistent anecdotal reports of increases in system size and in geographic span of those systems. I wanted to document that path and also to try better to understand the implications.
HLM: How do you define "cross-market mergers?"
Dafny: It is the combination of organizations that operate in distinct service markets for patients. That could be distinct geographic markets, but it could also be different product lines. The paper has two components. One is a theoretical section and the other is an empirical section. The theory applies to cross markets, which isn't just across geographies, but across different patient and user markets.
The empirical path pertains to the combinations across geographic markets. The same kind of theory could apply if you had a pediatric hospital merging with a general acute care hospital, or even if you had a large cardiology group merging with a large orthopedic group.
HLM: How are these cross-market mergers distinct from within market mergers?
Dafny: Within market, which is also called a horizontal combination, would be when two providers are competing to provide the same service for the same set of patients, which typically will have a geographic component as well as product line.
HLM: What percentage of hospital mergers are cross-market?
Dafny: Using the data from my study, which spans 2000 to 2012, we saw slightly more cross-market than within-market combinations. I'm not sure what the last three years of data would tell you. I haven't had access to it.
HLM: It appears that within-market mergers get all the antitrust scrutiny.
Dafny: It's accurate to say that it has gotten all the antitrust enforcer attention. The theory and the empirical evidence on within-market combinations tending to lead to price increases without commensurate quality improvements is very robust.
The authorities have a series of successful enforcement efforts beneath their belts. With cross markets, this is one of the first stabs at that question, not just in quantifying it empirically, but in actually developing theoretical pathways that could enable authorities to challenge these transactions.
HLM: Is it accurate to say that the biggest factor driving these price increases is that these combined provider entities have more leverage with insurers?
Dafny: The answer is yes. It appears that these combinations within states enable price increases that we don't document for out-of-state transactions. To the extent that system acquisition is doing something different to change a hospital's operations, we don't have any reason to think that those affects should be different across states but for bargaining power.
HLM: Are you surprised by your findings?
Dafny: The study confirms what many in the industry have long known, and yet it has escaped the scrutiny of antitrust enforcers, and of many hospital boards that may not fully appreciate the ramifications of these transactions.
I wouldn't say this is the newest thing under the sun, but actually it is pretty novel in antitrust enforcement circles and now having some information out there will cause a lot of C-suite executives to ask tough questions and think hard about whether this sort of deal serves their communities best.
HLM: Did you find any instances of cross-market mergers reducing prices?
Dafny: It's a regression analysis, so I have an average and there is an effect and a range and I can't single out any individual transactions. I would suspect that there are. Just as with any mergers, to evaluate the effects it is a merger-specific enterprise. I would never say 'all.' I would just say on average the effect seems to be to increase prices within states. That means you have to ask tough questions and take a look at these deals.
HLM: Are you suggesting that hospital boards should look at alternatives to mergers?
Dafny: It would be cavalier to propose a one-size-fits-all solution, but quite often there is an alternative. If there isn't, if it's "I'm going to go under unless someone acquires me and is able to negotiate a higher price," I would think carefully about whether that is in the best interests of the community.
Sometimes when you raise a community's healthcare costs, you jeopardize the community because it puts a strain on local businesses and their ability to stay open. If you really think the only way to stay open is to use bargaining power to raise prices, that might not serve the best interests of the community.
HLM: How would you like to see this study used?
Dafny: The number one place is in hands of decision makers who are going to frame our healthcare system for the future. I want it to be a competitive one based on creating value and not on creating market power.
The second is I would like the states' attorneys general who have requested this study and others who have heard preliminary presentations to consider whether there are cases in their docket that they might want to pursue and try to protect competition.
HLM: Should they use this study as a hammer or a scalpel?
Dafny: You always need to look at these transactions on a case-by-case basis. There isn't a one-size-fits-all. This raises some important questions. I'd like to see more work evaluating, extending confirming the findings. That's always good practice. But I also don't think we should wait until the entire sector is consolidated and merged away before we decide that there is enough evidence to raise concerns because, unscrambling the eggs is nearly impossible.
HLM: Did you receive any funding from the health insurance industry for this study?
Dafny: No funding, and in my co-authors work as well, nobody has received any funding.
When I write a paper like this, the insurance industry probably is appreciative. And then I write a paper on insurance mergers being potentially harmful and I am on their hit list. I am not about being on anyone's side except for the side of efficiency.
HLM: What response is your study getting?
Dafny: A couple of insurers I previewed this report with said 'of course we know this is happening.' In Mergerland, the merger is going to lead to price increases simply because of the greater ability of the merged entity to threaten the insurer. That is an anticompetitive transaction.
The fact that they are just waved through is concerning for the whole industry and our country because our healthcare spend is so incredibly high. The goal is to compete on value. That is what works in other industries and I am concerned that if our business leaders try so hard to avoid that we will end up with an even more expensive and ineffective sector without any choice in it.
The latest County Health Rankings report shows dramatic differences between rural and urban counties on several measures, problems that are exacerbated by a lack of access to healthcare.
Another study has quantified the health hazards faced by many rural Americans.
The 2016 County Health Rankings compares health disparities in more than 3,100 counties across 30 measures that include social determinants such as education, jobs, housing, exercise, and commuting times.
As in its previous six annual editions, the latest report shows dramatic differences between rural and urban counties on several measures, most notably premature death rates, for which the gap is widening. Rural counties have higher rates of premature death and one-in-five rural counties saw rises in premature death rates over the past decade while most urban counties improved on that measure.
Much of this could be attributed to rural America’s higher rates of smoking, obesity, child poverty, and teen births, and higher numbers of uninsured adults, says Bridget Catlin, co-director of County Health Rankings.
“Across the nation in general, everybody is getting healthier. But it doesn’t apply to every location and this is the wake-up call,” Catlin says. “A lot of people tend to think there are not a lot of people in rural areas, but that is not true either, because one-in-six Americans lives in a rural county.”
“It is difficult for rural residents to have access to medical care and it is difficult for the healthcare system to provide services,” she says. “You cannot build a hospital in every rural town. It is not sustainable or feasible. What you can start doing is moving towards telemedicine services. There are a lot of medical services where there is no physician contact between the provider and the patient, so those services can be provided remotely.”
Other Lagging Indicators
The data also show that many rural counties are lagging on other health behaviors.
“There are still higher numbers of smokers in rural communities, and the level of obesity is higher in rural communities,” Catlin says. “People have an image of rural living as active on the farm and moving all the time so you don’t need exercise. That is not the reality. A lot of people living in rural areas are not that physically active during the day, but they also can’t get out and walk down the street or exercise after work because rural areas don’t have sidewalks and there certainly isn’t a gym on every corner to use when the weather is bad.”
And there are social and economic barriers that make life stressful for rural Americans.
“Those are things like good jobs that pay at least a living wage, and education that helps you get a good job, and public transit [which is]is few and far between in rural areas,” Catlin says.
The 2016 Rankings include new health-related measures and found that:
Residential segregation between African-Americans and whites, a fundamental cause of health disparities, is highest in counties in the Northeast and Great Lakes regions and lowest along the Southeastern seaboard. In areas where African-American and white residential segregation is highest, there are typically vast differences in health, well-being, opportunity, and quality of life.
Drug overdose deaths have increased 79% nationwide since 2002 and are reaching epidemic proportions in parts of the nation. The highest death rates are in counties in northern Appalachia and parts of the West and Southwest.
One-in-three adults don’t get enough sleep, less than seven hours a night. Lack of sleep is tied to higher levels of stress and depression, hypertension, heart and kidney disease, motor vehicle accidents, and suicide. The highest rates of insufficient sleep are found in counties in the Southeast states and the lowest rates are in the Plains states.
Many of the metrics in these Rankings play off of one another in one unhealthy loop. Teen births lead to childhood poverty and low educational attainment, which leads to low-wage jobs and economic insecurity, which creates stress that leads to depression, which leads to self-medication because of a lack of access to mental health resources. A lack of access to healthy foods leads to poor diet choices, which leads to obesity, which leads to diabetes and other chronic health issues, which leads to depression, and so on.
But these are not fore-ordained, hard-and-fast determinants. People overcome disadvantageous economic, social and health-related circumstances every day. The data, however, clearly shows a linkage.
“Many of them are related, and that is why we encourage communities to look at their entire snapshot, all of the factors, and think about picking several of them that are closely related and looking for solutions,” Catlin says. “Look at your current needs and assets and pick areas to focus on. You can’t work on everything at once but pick a few important areas and look for solutions.”
The Rankings also provides a data base that pairs different strategies to address specific challenges such as smoking cessation and obesity, along with studies that show which strategies work and which don’t.
Catlin says healthcare providers and advocates should use the Rankings as a “call to action.”
“Everybody can do something to improve their environment. You don’t have to sit back and wait for others to do things,” she says. “I wish it were easy, that there was a single magic bullet that would help reverse this worsening trend. There isn’t. It’s going to take action on a number of different fronts. There is more to health than healthcare.”
Advocates for a voluntary patient safety identifier envision a process that would allow patients to create a way for medical systems to recognize them quickly and accurately, in much the same way as financial sector businesses.
A leading trade group for the nation’s health information technology sector is asking patients to endorse the creation of a national voluntary patient safety identifier.
The petition, which AHIMA hopes to send to the White House by April 19, asks for the removal of a ban that prohibits the Department of Health and Human Services from participating in efforts to create a patient safety identification system.
“That was way back in the original draft language of HIPAA. It had language specific to unique patient identifiers,” says AHIMA’s Pamela Lane, vice president, policy & government relations. “Back in the day there was a lot of concern about big government spying on people. So, when the final language came out, they’d taken the references to patient identifiers out.”
“To keep it from getting added back in, there was language put into the appropriations bill in 1999 that said that HHS could not use any of their resources on patient identifiers. They can talk about the problem, but they can’t talk about the solutions,” Lane says.
2,488 Maria Garcias
Lane says the need for patient safety identifiers continues to grow as 80% of doctors and 97% of hospitals use electronic health records. She cited a study conducted by the Harris County Hospital District in Houston, TX, which found that, among 3.5 million patients, there were nearly 70,000 instances where two or more patients shared the same last name, first name, and date of birth. Among these were 2,488 different patients named Maria Garcia and 231 of those shared the same birth date.
A specific patient identifier would ensure that each patient’s health information is kept together and is complete and remains under the patient’s control. AHIMA and other supporters of the voluntary patient safety identifier envision a process that would allow patients to create a way for medical systems to recognize them quickly and accurately, in much the same way as financial sector businesses.
“We don’t know what it will look like. We are not proposing any particular technical solution, but we don’t believe the technology is the problem anymore,” Lane says. “It could be something as simple as an email address specifically for healthcare, or could be like a banking [or] ATM number. The technology exists for there to be lots of things to talk about. There are brilliant minds that have been working now for almost 20 years since HIPAA was enacted on technical solutions. We just want to be able to have private/public conversations.”
Lane says AHIMA members often see firsthand the problems associated with mismatching patient IDs.
“We’ve waded into it because we are the profession in healthcare that has to clean up a lot of the problems,” she says. “Let’s say there are two patients with the same name. Many, many times the people who match those records and validate those identities are EMR professionals. We are the ones who have the closest real-world knowledge of the problem.”
The petition marks the first direct appeal to patients and consumers by AHIMA, which is not well known outside of healthcare circles. “We have not traditionally been consumer-facing as an association. This is a brand new avenue of advocacy for us,” Lane says.
“This is a great opportunity to say ‘I am the one who on the back end fixes the problem and I am going to help you find ways to fix it on the front end.’ We also have worked with other associations and groups, as they reach out to their members, who reach out to patients. It’s a heavy lift, but we don’t have to do it all ourselves.”
A legal expert discusses the implications of Medicare's final rule governing billing and coding errors on physicians practices and hospitals.
A final rule change issued last month by the Centers for Medicare & Medicaid Services could have a significant impact on how physician practices address billing and coding errors dating back six years.
John Fanburg, managing partner and chair of the health law practice at Brach, Eichler in Roseland, NJ, spoke with HealthLeaders Media about the final rule and what physician practices should do to prepare for any billing discrepancies, and what the potential implications are for hospitals. The following is an edited transcript.
HLM: What does this rule change do?
Fanburg: The issue had to go with how far back the provider had to go to make the refund. For some time there has been this 60-day timeframe within which to make the refund due to the overpayment.
There has been some ambiguity as to when that clock runs and the proposed rule required the timeframe to go back 10 years. For obvious reasons, the healthcare industry totally rejected and lobbied against a 10-year look-back period, but they did settle on six.
Some providers would say that is not much better, but at least it’s not 10. The rule clarified the use of the word ‘identification:’ When the overpayment is identified, what does that really mean, and what is the look-back period. These were critical for providers to understand how to be compliant.
HLM: What was the look-back period before the rule change?
Fanburg: There was always a proposed rule. No one was ever clear. There was a statute of limitations argument and depending upon the case it could be four, five, or six years.
HLM: When does the clock start on the 60-day identifier?
Fanburg: Where they ended up is when the provider knew or should have reasonably known. That could be played with as well. So, they impose an obligation to make reasonable inquiry if something were to happen. They are saying that if you get some type of credible inquiry or report you have an obligation relatively quickly based upon the facts to make due inquiry in terms of whether or not there was a problem.
Lots of things can be inadvertent. For example, the practice sees their Medicare reimbursement jump up for no apparent reason. It could be coding mistakes, which occur all the time. Sometimes there is a computer glitch and a different code goes out.
Maybe, in more egregious situations, the practice is involved in some type of fraudulent action. Maybe a provider who you thought was licensed is not licensed, whether it’s a physician or a physician assistant, etc. And when it is identified or comes to the level of being a problem, the group has to make relatively quick inquiry to determine whether or not that has happened. That is when the clock would start to run.
HLM: What should a practice do if they think they’ve got a problem?
Fanburg: I usually recommend that they bring in an independent third party and do a quick assessment to determine if their suspicions are correct, because a lot of times the provider really doesn’t know the magnitude of the economics that is called for so that they can comply.
The government is trying to make this as user-friendly as possible (although some might disagree) because they want the providers to voluntarily do this. It is a lot easier for providers to voluntarily do it than for the government to do audits and investigations, or wait for their hotline tips to identify. They seem to be very cooperative when a provider comes to them voluntarily and they respond in kind.
HLM: What sort of challenges are created with this six-year look-back period?
Fanburg: Let’s say a physician leaves the practice, retires, is bought out, and all of a sudden two years later there’s an identified overpayment. They go back six years. This retired physician was part of the practice at that time who received their pro rata portion of the money.
Well, who is now obligated to refund the money? Clearly, the practice is. But should that retired physician have any obligation to contribute to that refund since he or she received the proceeds from that? Because of that, physician practices need to consider updating their retirement documents and buy/sell documents to address this situation.
If I were in my early 40s and we were forming a practice, absolutely we would put some version of that obligation. But if I were 65 and within five years of retiring I’d be scared to death because I am the one they are going to come after and I may not be willing to do that.
So, there is going to be a political issue when addressing this in the practice. There is going to be some balancing act where up to a particular point you are going to have to contribute something.
I am thinking we may see the development of some type of insurance policy to fund this, because it could be very damaging to the remaining physicians in the practice. That is why as uncomfortable as this discussion may be, it requires a dialog and some compromise as to how this thing is going to play out.
HLM: What steps should practices have in place should a problem arises?
Number one, they have to have a corporate compliance program that is real and not just a book on a shelf. A subset of that is they need to be proactive in their own random audits of coding and billing to ensure that they have the right checks and balances and systems in place.
Number 2, because of the look-back period, they need to review their corporate documents and determine to what extent should they have provisions in the documents to require physicians to contribute to an overpayment refund request for the period they were in the practice. Whether that is for all six years or a smaller timeframe for that is subject to negotiation, but they should not ignore it.
Number 3, if they do identify or someone does bring to their attention that there has been a mistake in billing, coding, or collecting, they cannot ignore it. They have to jump on it right away because the clock starts ticking and you don’t want to create a whistleblower in the practice.
HLM: Does the same scenario apply if a physician leaves a practice, rather than retires?
Fanburg: When someone is bought out, typically there is an indemnification. That is a pretty standard provision, but a refund obligation or contribution for up to six years could be significant. Sometimes in the indemnification there is insurance to cover that. This is an uninsured potential liability.
HLM: What happens if a hospital acquires the practice?
Fanburg: Almost all hospital/physician transactions we do have that indemnification with the physicians indemnifying the hospitals in case there is a refund obligation.
Now that it is specified in terms of six years, that could be a sizeable obligation back to the hospital. If a couple of the doctors are no longer there, then the remaining physicians are on the hook to cover the gap.
HLM: Will ICD-10 help or make matters worse?
Fanburg: Knowing how easily it is for physicians to adapt to these new programs, the likelihood is that innocent mistakes will occur and it will cause a little more chaos.
HLM: Will commercial payers follow suit on the six-year look-backs?
Fanburg: That would require state regulatory or legislative changes to do that.
HLM: Do you foresee any effort to overturn this six-year look-back period?
Fanburg: I don’t see that happening unless the collateral implications of physicians who are long gone from the practice create an unfair result for innocent third parties.
It is going to take a long time for that to flush out to the point where it would become politically viable to change the rules. So, I don’t see any change to this for a long time.
