Health improvements in sparsely populated Franklin county are no fluke. Forty years of data illustrates that population health works, and that just about everybody can do it with resources they already have.
All the talk around population health makes it sounds like a new concept even though it's been around for nearly half a century.
One pioneer movement for population health in the United States began in Franklin County Maine, a sparsely populated, rural, inland expanse north of Portland. Many of the county's 30,000 residents are older, sicker, and poorer than the overall population of the state.
Franklin County, ME
Yet, when it comes to certain conditions, particularly cardiovascular health, the residents of Franklin County enjoy the same or better health status than their fellow Mainers in counties with younger, wealthier populations.
This is no fluke. Rather, it is the payoff from decades of community health outreach. In the late 1960s, physicians in the county seat of Farmington joined with the hospital and community leaders to improve and coordinate care for the county's poor.
"It started by recognizing that there weren't very many physicians in the county, that they were all getting older and that there were virtually no specialists," says Roderick E. Prior, MD, a semi-retired primary care physician who has spent the last 38 years working with the county's population health effort.
"This was all before my time," Prior told me. "This was the time of the Great Society in the 1960s. The Office of Economic Opportunity had been started and they were looking at healthcare. They encouraged those folks to think bigger."
Initially, the federal government provided funding to create comprehensive health and dental care for 3,000 people in the county. "That was 15% of the population of the county," Prior says.
"All of a sudden our uninsured rates went down. Access to care became much more available. The other thing that happened was some real interest in outreach. Organizations started some rural health clinics which eventually became federal qualified health centers. We started using mid-level nurses. We were one of the first training grounds for the physician assistant profession."
Prior says the pioneering physicians in Franklin County understood that they were not practicing medicine in a vacuum, and that they needed to work with government, schools, and other community organizations to coordinate care. They worked with the University of Maine at Farmington to create a training program for community outreach workers.
"They were thinking about things like transportation—[whether] people could travel to get their healthcare," Prior says. "Traditionally, if the patient doesn't show up the doctor says, 'I can't treat you if I you don't come in,' without recognizing that most people can't come for whatever reason; the car is broken down or they don't have gas or the employer says they have to work, or if the kids are sick."
"But it was an organized community-based effort that started looking at where the problems were and went beyond just providing a doctor and medicine to reaching out, finding people who had health problems, and then getting involved with them, monitoring them," Prior says.
"When I use the word 'community,' I mean that people need to identify their community, which means the people for whom you and your colleagues are willing to take responsibility for their health."
40 Years of Results
Over the decades, the funding has ebbed and flowed, but the program has endured and transcended generations of patients and providers.
To get an idea of the effect of the care coordination, Prior and his colleagues examined the data around 40 years of work to improve cardiovascular health in Franklin County. The results were published this month in theJournal of the American Medical Association.
Before the population health efforts began, Franklin County had higher death rates for heart attack and stroke than the statewide average. Once the population health efforts began, however, Franklin County was the only county in the state with consistently lower-than-expected mortality rates for heart disease and stroke.
The county has also seen a steady uptick in smoking cessation and cholesterol control. Researchers estimate that the improved health of the population has saved about $70 million through reduced hospitalizations from 1994 to 2006.
A Large Caveat
That bit of good news comes with a large caveat that explains why population health has yet to catch on in a fee-for-service world.
"There is nobody in Franklin County who is clearly make money from doing this," Prior says. "The savings are going to the insurers. It's Medicaid and Medicare. And, if you look at the way private insurance companies price their products, they don't look at the mortality and hospitalization rates of Franklin County and give all the employers a cost break."
That is a topic for another day.
For now, the lesson from Franklin County is that population health works, and that just about everybody can do it with resources they already have.
Prior says "it's easy" to identify the health risks in any community down to the county level by using publicly available data found on the Centers for Disease Control and Prevention website. At the risk of oversimplifying, identify the healthcare needs of the people you serve, and then find a way to deliver the care once that need is identified. If you can demonstrate the need, the community support will follow.
Looking back on his own nearly 40 years of public service, Prior says he's proud to have played a role in the work of Franklin County's pioneering physicians.
"I wanted to practice medicine and make a difference. I think we have proven to ourselves that we've made a difference," he says. "We wanted to tell our story because we think it's not a bad model for people to think about [as they think about] what they might do… in their own communities."
More than half of healthcare executives surveyed believe they'll see a return on investment for healthcare information technology and data/analytic tools in four years or less.
More than half of healthcare executives believe they will recoup their investment in population health management programs within three to four years, an online survey from KPMG LLP shows.
"It can be realistic within three or four years, but let's not sugarcoat it. It takes a lot of time, effort, commitment, and understanding to make that happen," says Joe Kuehn, a partner with KPMG's Healthcare Advisory Practice.
"It needs a commitment to change how you're rendering care and getting funded from that care, moving away from fee-for-service base to quality and outcomes and some form of value-based payment. But there is still enough fat in the system and low-hanging fruit where those quick wins can be used to fund and reduce the costs and ultimately deliver that ROI."
The upbeat forecast from nearly 300 healthcare executives came even though 24% of them described their own population health management capabilities as "mature." Nearly 40% described their population health capabilities as "nonexistent," and 38% describe their capabilities as in the "elementary stages."
"Trying to determine what the ROI is up front is sometimes more art than science, but looking at technology and population health management in a vacuum isn't what we are looking at," Kuehn says.
"It's looking at the future of healthcare delivery and the design of new target operating models, meaning redesigning the care delivery systems and business models to practice differently and also to practice in a way where we can accommodate new forms of payment and funding for the care we are rendering."
The survey found that 20% of executives believe they'll see an ROI for healthcare information technology and data/analytic tools within two years, and 36% said they expected an ROI within three or four years. Another 29% see the ROI in five years or longer, and 14% say they'll never recover the investment.
Levi Scheppers
'The Right Thing to Do'
Levi Scheppers, chief administrative officer atNebraska Medicine, says the Omaha-based health system projected the ROI for the cost of the IT infrastructure and the new personnel needed for population health. The tricky part was trying to determine the cost of utilization of the "kept market share" and the risk of not doing anything.
"You think you are going to keep utilization, but on the flip side your competitors are thinking the same thing," he says. "Ultimately, we got comfort in doing it because it is the right thing to do at the macro level. It is the new cost of doing business in healthcare. You need to know how to produce value more consistently as opposed to just increasing prices and hoping volumes follow."
While there are uncertainties around any financial model for population health ROI, Scheppers says, "you have to do the financials to even have the conversation."
"You don't always have to make the decisions off of the financials, but you need to know it. It is still a valid lens. You need to know what you anticipate recouping," he says. "The approach we took was 'if we are going to do it we need to make sure we understand the financial risks so we are making the right decisions as we are implementing these strategies.'"
"Just make sure you know the risks you are taking and the assumptions you have made in order to recoup any semblance of the investment, but it's not a go/no go based on purely the financials."
Retail Disruptors
Forecasting ROI becomes even more complicated when the dynamism of the budding retail market for population health is factored into the equation.
"We've had Walmart trying to enter the market from a primary care base. You have CVS and Walgreens executing on their care delivery strategies. You have DiVitamaking their acquisitions of risk-taking providers and trying to deploy that nationally. All of those providers are disruptors and it's tough to incorporate all of those risks into our traditional models from an ROI perspective. So, we are monitoring the risks as we make our decisions, and that is more critical than purely trying to break even within two to four years."
Even with the daunting challenges in a new and fluid market for population health, Kuehn says providers are better served by joining the fray now, rather than letting others do the heavy lifting.
"It takes folks who can see over the wall and understand where they need to be going," he says. "Those that are more proactive are going to be the winners because they have the time to make some mistakes that aren't financially devastating."
"Those who are sitting on the sidelines watching the game, by the time they get in it they are going to be under duress and pressure to make it happen, and that makes it that much more difficult."
Tavenner steps down at the end of February, citing no future plans. She cites success in Healthcare.gov enrollment and improved quality of care.
Centers for Medicare and Medicaid Services Administrator Marilyn Tavenner will step down from her job at the end of February, Health and Human Services Secretary Sylvia M. Burwell announced Friday.
Principal Deputy Administrator Andy Slavitt will become the Acting Administrator when Tavenner leaves, Burwell said in an email to HHS staff.
Tavenner came to CMS in 2010, a few weeks after President Obama signed the Patient Protection and Affordable Care Act. Her nomination as CMS administrator was confirmed by the Senate in May 2013. Burwell on Friday noted that Tavenner was "the first Administrator to be confirmed by the Senate in six and half years—and she was confirmed with overwhelming, bipartisan support."
Burwell praised Tavenner for delivering "historic results at the helm of CMS."
"Under her watch, the solvency of the Medicare Trust Funds was extended to 2030," Burwell said. "In addition, her work on healthcare quality helped our nation achieve a 17% reduction in hospital acquired conditions—saving an estimated 50,000 lives and $12 billion in healthcare costs."
In a farewell email to CMS colleagues, Tavenner did not say what prompted her decision to leave CMS or what she would do after she leaves.
"I feel fortunate to leave here with a great sense of accomplishment, a wealth of knowledge, many new friends, and the comfort of knowing that the citizens of this country and I are in great hands with all of you and your incredible drive and commitment to continue transforming our healthcare system," she said.
Unfairly or not, Tavenner will be best remembered as leading CMS during the botched rollout of the federal health insurance marketplace in October 2013. That failure ultimately led to the resignation of HHS Secretary Kathleen Sebelius in April, 2014. Tavenner's email to CMS staff did not mention HealthCare.gov, but instead focused instead on enrollment successes, improved quality of care, a crackdown against Medicare fraud, and progress in controlling healthcare costs.
Slavitt, who has served at Tavenner's top assistance since he joined CMS last summer, has extensive experience in the commercial health insurance sector, where he worked for UnitedHealth subsidiary Optum.
"Andy joined HHS with over 20 years of private sector experience," Burwell said. "As Principal Deputy Administrator, he oversees HealthCare.gov and the Department's work to upgrade the consumer experience. In addition, Andy is responsible for cross-cutting policy and operational coordination for the agency's Medicare, Medicaid, CHIP, and Marketplace initiatives; combatting health care fraud; reforming healthcare delivery; and improving health outcomes."
Hospital administrators, unable to close a budget deficit, have unveiled a cost-cutting plan that eliminates 3.2% of the jobs at Houston's safety net health system.
News this week that Houston-based Harris Health System would shed 262 jobs to help cover nearly $72 million in red ink provides a stark example of the financial challenges confronting Texas's safety net hospitals, observers say.
"The state's decision to not accept Medicaid expansion or find a Texas alternative is a contributing factor to our projected budget shortfall," Harris Health spokesman Bryan McLeod says.
"So, too, is the federal government's decision to decrease the dollars available to health systems through the Disproportionate Share and Uncompensated Care programs, since Medicaid Expansion, if adopted, would be the offset for those programs."
In December, Harris Health CEO George V. Masi told staff he anticipated a "reduction in force" of about 125 jobs to cover the shortfall. That estimate more than doubled this month when hospital administrators unveiled a cost-cutting plan that eliminates 262 jobs, including 112 currently staffed positions.
"The RIF, coupled with other cost-cutting measures, is necessary as we work to close a substantial projected budget deficit for the coming fiscal year," Masi said in a notice to employees.
"We are this community's safety net health system," Masi said. "Nobody provides healthcare to those most in need better than Harris Health. We will continue to deliver high quality health services as efficiently as possible with the resources we have available."
The job cuts account for 3.2% of Harris Health's 8,237 employee positions. The reductions in workforce are not expected to affect patient care and will be finalized this week, McLeod says.
Texas is one of several Red States that has adamantly rejected Medicaid expansion money, which some studies have estimated would have brought Texas nearly $6 billion in federal matching money every year, including $782 million to $935 million in Harris County, where Houston is located.
Newly elected Texas Gov. Greg Abbott told The Wall Street Journal this week that he opposes expanding Medicaid as it exists, "but like anyone with an inquiring mind, we'll look at any idea anyone has" on how to effectively deliver healthcare.
A Bellwether?
As it stands, there does not appear to be any plan in the works to propose an alternative.
Maureen Milligan, president/CEO of Teaching Hospitals of Texas, says there is concern that Harris Health is a bellwether for Texas's six safety net hospital districts, all of which operate under similar funding schemes and which face many of the same financial challenges.
"The Texas hospital financing structure is very unstable," Milligan says. "Medicaid expansion would put a lot more money in the system. Right now you have local hospital districts paying 40% of disproportionate share and uncompensated care costs. Some of those funds would be reduced when people actually have access to healthcare under an expansion. So yes, it would definitely take the pressure on some of the financing issues."
Milligan says the political climate in Texas towards Medicaid expansion remains hostile, and that advocates should "build the business argument along with the health argument."
"You don't want to paint yourself as 'pro Obamacare.' The conversations that have to happen have to happen quietly so nobody gets a target put on their back," she says. "The goal would be to open up the conversation with business leaders in local communities saying 'This is killing us. This is a lot of money and it's good for Texas.'"
Little Relief
The not-for-profit hospital sector already faces strong headwinds, even in states that have expanded Medicaid. Standard & Poor's Rating Services this week reported that operating pressures on the sector likely would continue through 2015 and result in more ratings downgrades than upgrades for the third straight year.
"Operating margins were pressured by top-line revenue constraints, soft demand, a movement toward value- and risk-based payment structures, the impact of reform readiness activities, and the high cost of electronic medical record implementation and maintenance," S&P credit analyst Cynthia Keller said this week.
"While we have seen some relief stemming from the expansion of health insurance coverage under the Affordable Care Act which improved revenue streams at many hospitals, merger-and-acquisition activity, and strong investment markets in 2014, these forces have not been sufficient to reverse the generally negative trends driven by revenue and cost pressures."
Although the federal program that provides healthcare for millions of poor people faces some legal hurdles, governors in some states that have refused Medicaid expansion are starting to reconsider.
On the national scene and in the media, Medicaid often takes a back seat to Medicare.
That's understandable. Medicaid is a smaller program; the poor people it serves don't have the political clout of Medicare recipients; and Medicaid is much harder to track on a national level because each state administers its own program.
The day-to-day operations of Green Mountain Care in Vermont, for example, may not much affect what happens to Missouri's MO HealthNet. It's hard to build a national consensus or a political movement around so many fiefdoms.
Nonetheless, Medicaid is a vitally important and expensive program that affects the lives of millions of poor and vulnerable people who would otherwise go without health insurance coverage.
The program will be in the news this year on several fronts, so I've rounded up a sampling of some of the issues that likely will be taken up in 2015.
Medicaid Parity Funding Expires
The New Year started off on a dour note for Medicaid with the expiration on Dec. 31 of Section 1202 of the Patient Protection and Affordable Care Act. The Medicaid-Medicare Parity provision had earmarked $12 billion in 2013 and 2014 to raise to Medicare levels the Medicaid fee-for-service payments for primary care physicians. Without action from Congress, however, the provision expired at the end of the year.
The American Academy of Family Physicians and other provider associations want the Republican-controlled Congress to reinstate the money this year, but that is laughably unlikely because the Republican-controlled Congress hates anything to do with Obamacare and has spent much of its time trying to eviscerate it.
SCOTUS Hears Idaho Medicaid Suit
The U.S. Supreme Court next Tuesday will hear oral arguments in Armstrong vs. Exceptional Child Care Center, Inc. I wrote about this case back in October. In a nutshell, providers in Idaho complain that the state's Medicaid reimbursements are insufficient to cover costs, and are thus a violation of Medicaid's equal-access mandate because they create a barrier to care access for the state's poor.
The chief question before the court is whether or not the Supremacy Clause in the U.S. Constitution grants providers the "private right" to sue the state to increase its Medicaid reimbursement rates.
The American Medical Association is one of a number of parties with vested interests that have filed a friend-of-the-court brief. AMA President Robert M. Wah, MD, said in prepared remarks this week that "the sad fact is that Medicaid's guarantee of equal access has become an illusion in many states that have cut Medicaid funding and driven physicians and other health professionals from the program."
The AMA cited a report by the Government Accountability Office which showed that 38 states were unable to attract enough physicians and dentists to serve new Medicaid patients and that low Medicaid payment rates were a leading cause.
Matt Salo, executive director of the National Association of State Medicaid Directors, says allowing private parties to sue Medicaid for perceived inadequate rates would create chaos.
"There is a process to determine what constitutes appropriate rates and how to define access. Medicaid is administered by the states and overseen by the federal government. Health and Human Services has very effective guidelines and processes for determining these issues," Salo wrote in an email exchange.
"We think it is unnecessary and counterproductive to open up that process to other parties who feel aggrieved by the results. Private right of action on this issue (can you name a provider or group of providers who think they're paid too much?) would unnecessarily clog up the courts and prohibit the effective and efficient operation of the Medicaid program."
Medicaid Expansion in Red States
Throughout this year we can expect to read about Red State governors reconsidering their ill-advised and politically motivated decisions to reject billions of federal dollars in the form of Medicaid expansion money.
The Obama administration earlier this month pledged to work with the states that were considering non-traditional alternatives to expanding Medicaid and governors are grasping that olive branch, perhaps to use it as a fig leaf.
Tennessee last month was the latest state to bow to reality when Gov. Bill Haslam (R) pitched a plan that would allow Medicaid-eligible adults to use the expansion money to buy private coverage. The proposal will be debated by a special session of the Republican-controlled Tennessee General Assembly next month. The Centers for Medicare & Medicaid Services also would have to approve the deal.
Political leaders in Kansas, North Carolina, Utah, Colorado, Wyoming, Montana and other non-expansion states have also expressed an interest in creating their own version of Medicaid expansion. There were even reports that Texas' new Gov. Greg Abbott (R) during a closed-door staff meeting last month expressed some interest in expanding Medicaid. That idea was buggy whipped when it became public, however, forcing the governor's spokesperson to claim that Abbott's remarks had been "misinterpreted."
At the point where it becomes politically expedient, Texas will adopt Medicaid expansion. I cannot imagine that Texas's healthcare sector, which includes huge and wealthy for-profit and not-for-profit health systems, is not aggressively pushing for some form of expansion. They understand that the state is missing out on billions of dollars of federal subsidies, even as hospitals are required to provide care for people who can't otherwise pay.
In 2015, the question for Texas—and all non-expansion states—will be not "if" but "when."
Data showing that 2014 had the best job growth since 2008 suggests that hospital leadership is becoming more comfortable with the Patient Protection and Affordable Care Act, says a managing director at PwC Health Research Institute.
The 311,000 new jobs created by the healthcare industry in 2014 represent the largest year of job growth in the sector in the past seven years, and it may suggest that providers are more comfortable with the Patient Protection and Affordable Care Act while acknowledging the challenges of care access for an aging demographic.
Healthcare created 10% of the 2.95 million new jobs in the overall economy in 2014. The 311,000 new jobs in healthcare last year represent 2% of the 14.9 million people employed in the sector at the end of 2014. That includes 6.8 million people in ambulatory care, 4.8 million in hospitals, and 3.3 million in nursing and residential care.
Ceci Connolly,
Managing Director
PwC's Health Research Institute
"With healthcare representing about 17% of the U.S. economy, it is not surprising that one-in-10 new jobs would be in healthcare, even if the growth in overall health care spending has slowed," says John Ayanian, director of the University of Michigan Institute for Healthcare Policy and Innovation.
Ceci Connolly, Managing Director at PwC Health Research Institute, says she's not surprised either because "healthcare is typically a growth industry and there are a couple of reasons why that's even more the case right now."
"One is in part the Affordable Care Act," she says. "There are many more covered individuals. They are paying customers and so that's required more temporary and fulltime positions to get them signed up and answering their questions and getting them their care."
"The other factor that comes through loud and clear is the aging of the population. Demographics are showing we are living longer and we need and are using more healthcare services and products," Connolly says.
"That is a lot of the big growth in home health and personal care aides, physical and occupational therapy—a number of those areas where we are seeing big growth and we expect that that is going to continue."
Less Anxiety About Reform
A further breakdown of BLS data for 2014 shows that there were 230,300 new jobs in ambulatory services, 47,300 jobs in hospitals, and 33,400 jobs in nursing and residential care. The healthcare sector saw job growth of 65% in 2014 compared with the 203,000 jobs the sector created in 2013, which saw hospitals shed 500 jobs that year.
Healthcare job growth in 2014 was the best since 2008, when the sector created 317,400 jobs, BLS data shows.
Connolly says the job growth in 2014 when compared with 2013 suggests that hospital leadership is becoming more comfortable with the Affordable Care Act.
"We did see a certain amount of anxiety as the ACA was being implemented," she says. "I think hospital executives in particular were exceedingly cautious about the law and now there is a little more of a comfort level or an understanding. They've gotten it a little more under their belts. We are also seeing more covered laws with the Medicaid expansion and exchange customers so that is helping them soften the blow of some of the reduced reimbursement rates."
'Reasons for Some Growth'
Mary Ellen McCartney, Chief Learning Officer at La Crosse, WI-based Gundersen Health System, says she was somewhat surprised to see hiring increasing because labor is a huge cost driver at a time when providers are squeezed to reduce costs.
"There are reasons for some growth," McCartney says. "The population is aging and they are including long-term care here, and more people seeking care as the population ages. There is also growth in ambulatory services, the largest growth area, and that makes a lot of sense because we are trying very much to steer our care to the most cost-effective places for patients."
McCartney says she anticipates a demand for technology workers in healthcare with "the advent of technology, [in] particular electronic medical records and more intense technology requires jobs that weren't in healthcare."
"Hospitals are like a little city," she says. "We have a wide variety of services that we need to have on staff in the hospital that we didn't have to have in the past. I believe that the economy is shifting to more knowledge workers in healthcare and there is growth in those areas."
The demand for physicians, especially primary care physicians, is expected to remain strong this year and well into the future. Because the demand outstrips the supply, Connolly says "physician extenders" such as nurse practitioners and physicians assistants will continue to be in high demand.
"One of our Top 10 Trends in 2015 is the growth in the use of non-physician care givers. They are lower cost but they can still do a phenomenal amount on a care team," she says. "Those are going to continue to be big growth areas, especially when you see more accountable care organizations and bundled payment arrangements. You are going to see the approach of integrated clinical care teams and much of the hiring will be just below the physician level."
What About Cost Control?
As to whether or not a new era of healthcare hiring is a good thing in the context of controlling costs, Connolly says, "that depends upon your perspective."
"For a long period of time this sector was flat or weak coming out of the recession. This growth is probably healthy," she says. "On the other hand, I am sensitive to concerns about spending growth in healthcare. When you are looking at growth in some of the extender categories such as physician assistants, nurse practitioners, and personal care aides, that is a good thing because they are responding in a cost-effective manner to the needs of an aging population. I am happy to see that as opposed to the very high-end specialists, which we know is where there is generally over-utilization of services and waste."
More than 6 in 10 physicians say they've received 50 or more job offers during their residency, and more than 4 in 10 received more than 100 job offers, according to data from a physician recruiting firm.
Physicians completing their final year of residency say they're entering the job market with scores of job offers and most anticipate earning $176,000 or more in their first year of practice.
More than 60% of the 1,208 new doctors responding to an email survey from physician recruiters Merritt Hawkins say they've received 50 or more job offers during their residency, and 46% received more than 100 job offers.
"There is no such thing as an unemployed doctor," says Kurt Mosley, vice president of strategic alliances at Irving, TX-based Merritt Hawkins. "The good news is all of them need a job. The bad news is they only come out one time a year."
Along with the strong job prospects, however, half of the residents say they owe $150,000 or more in students loans, and 25% of new physicians say they'd pick another profession if they had a do-over.
Ronald A. Paulus, MD, president/CEO of Asheville, NC-based Mission Health, says he's surprised the number of malcontents-in-residence is so low.
"Medical students measure extraordinarily high on compassion and empathy and by the time they're done with their residency it is very low," Paulus says. "The training process has been around since the early 1900s with only moderate changes. It is an extraordinarily grueling time."
"We need to look internally and ask what is it about this process that creates the change, because that is not what we want. We don't want to stamp out compassion and empathy. We want to boost it. We don't want people regretting their career choice. We want them embracing it."
Hospital Employment Alluring
Mosley says new physicians are entering a healthcare landscape that has changed dramatically since the day they entered medical school.
"In the past three years medicine has changed the most since 1965 and the arrival of Medicare and Medicaid. Many of the doctors who I talk to say 'Obamacare is not what I signed up for,'" Mosley says. "There are a lot of unknowns and people do not like unknowns. Some of it is trepidation, and some of it is what they are hearing from other physicians."
As for work settings, more than one-third (36%) of new physicians say they're "most open" to employment by a hospital. Mosley says that's understandable.
"That's where they were trained. There is strength and security in numbers, more depth and breadth," he says.
"When we're advising our clients about recruiting, we are saying in a lot of cases that hospitals have a better offer. It's not necessarily the geography as it is the primacy of the workshop. You've got to have a not just a reasonable schedule but a set schedule, 8–5 or 9–6, call coverage, hospitalists. Hospitals have all that and they know new docs want to be in that environment."
Rural Prospects
For those same reasons only 7% of new physicians expressed an interest in practicing in an area with a population of 50,000 or fewer. Only 2% said they'd practice in a town with 25,000 or fewer. Nearly half (47%) say they want to practice in an area with 500,000 or more people.
"This does not bode well," Mosley says.
"Most of the residencies are in the big cities, and they get a taste of it. They don't have any exposure to rural areas. We are telling our rural clients: If you don't have the complete primacy of the workshop, set schedule, hospitalist, call coverage, time off, locum tenens for solo practices, it's tough."
"Communities will have to grow their own," Mosley says. "Rotary, Chamber of Commerce, whomever: They'll have to help prepay medical school tuition in exchange for returning to practice for a few years."
The survey found that 78% of the physicians anticipated earning $176,000 of more in their first year. Mosley says new physicians are savvy about their earning potential. "They can go to our website and pull up a specialty and know what doctors make all over America," he says.
Even so, 22% of physicians expect to earn $175,000 or less in their first year.
"The average family practitioner makes $200,000 plus no matter where they are, so this indicates that some of these residents coming out are going to practice part time," Mosley says. "A lot of our clients want full-time doctors only, but in a lot of cases it could be good to have a husband and wife part time."
Paulus says his interactions with new physicians suggests that they are more mission-driven.
"It's not that they don't want to earn, but they are less fixated on maximizing income and having this life/work balance and making a difference," he says. "They also don't want to deal with many of the hassles that would traditionally be in place; starting a practice, worrying about billing and those things. It would be overgeneralizing to say that they want to come in, do their thing, and go home in a shift-like model, but that is the trend."
"Geographic location" was listed as the "most important" consideration (69%) for the new physicians, followed by lifestyle (61%), adequate call coverage/personal time (60%) and "good financial package" (60%).
Changing Expectations
Paulus says it's time to acknowledge and adapt to the profoundly changing expectations of the younger physician workforce.
"I have seen estimates that it takes 1.6 new graduates to replace one retiring," he says. "There are multiple reasons why and the biggest ones are lifestyle reasons. On average, new grads are more interested in a work/life balance than older graduates were."
"There is different speculation as to why that is the case. I am not trying to stereotype, but one thought is that over half of U.S. Medical students are female. That is a different dynamic than existed back whenever I was in medical school, and even before that. But, both males and females want to have more time with their families, more free time. So the choices that they are going to make are going to be driven by what can provide that kind of balance."
"I think most all of these things are very good," Paulus says. "The desire for a better life balance is a good thing and maybe we were the ones who were screwed up."
The healthcare sector saw job growth of 65% in 2014 compared with the 203,000 jobs the sector created in 2013, federal data shows.
Healthcare accounted for 311,000 or more thanone in 10 new jobs created in 2014, which was the best year for job growth in the overall economy since 1999, Bureau of Labor Statistics data released Friday show.
The nation saw 2.95 million new jobs created in 2014. In the healthcare sector, there were 230,300 new jobs in ambulatory services, 47,300 jobs in hospitals, and 33,400 jobs in nursing and residential care.
The healthcare sector saw job growth of 65% in 2014 compared with the 203,000 jobs the sector created in 2013, which saw hospitals shed 500 jobs that year.
December's job figures are considered preliminary by BLS and subject to revision.
Minnesota's highest court has ruled that hospital "medical staff" meet the statutory criteria to sue and be sued at hospitals where physicians have privileges and that medical staff bylaws are an enforceable contract between the medical staff and the hospital.
The New Year got off to a good start for physicians with the Minnesota Supreme Court ruling that strengthens the autonomy of hospital medical staffs.
In a 5-2 opinion issued on Dec. 31, the Gopher State's highest court overturned a state appeals court and said that hospital medical staffs "composed of two or more physicians who associate and act together for the purpose of ensuring proper patient care at the hospital under the common name 'Medical Staff'" meet the statutory criteria to sue and be sued at hospitals where physicians have privileges.
Along with that, the high court ruled that medical staff bylaws are an enforceable contract between the medical staff and the hospital.
The ruling marks the latest turn in a three-year running battle between Avera Marshall Medical Center, in Marshall, MN, and its medical staff, which saw its bylaws unilaterally amended by the board of directors after Avera acquired the hospital in 2009.
Writing in dissent, Justice G. Barry Anderson said that "at its heart, this case is about who has ultimate control of Avera Marshall Regional Medical Center—Avera Marshall's Medical Staff or Avera Marshall's board of directors. As a matter of contract law, and under the terms of Avera Marshall's corporate bylaws and the medical staff bylaws, the answer to that question is Avera Marshall's board of directors."
Anderson went on to express concerns that the majority's opinion "will encourage conflict between medical staffs and a hospital's board of directors. Ultimately, in my view, a hospital's board of directors must be allowed to amend medical staff bylaws when it has expressly reserved ultimate authority over the medical staff and determines that doing so is in the best interest of the hospital and patient care."
The case was remanded back to a state district court.
A call to Avera Marshall Medical Center was not immediately returned.
The Minnesota Medical Association, which filed an amicus brief on behalf of the Avera Marshall medical staff, had argued that the medical staff bylaws were "a binding contract that protects the medical staff's role in facilitating the quality of patient care which, traditionally, has been a key function of a hospital medical staff."
MMA President Donald Jacobs, MD, said the ruling marks a huge victory for physician autonomy and patient safety.
"An independent, autonomous medical staff serves a critical role in facilitating and maintaining quality patient care in a hospital setting and should have a strong, collaborative voice in the decision-making process regarding that care," Jacobs said in prepared remarks.
Those remarks were echoed by American Medical Association Robert M. Wah, MD, who called the ruling "an important court victory in support of medical staff autonomy and the enforceability of medical staff bylaws. The court ruling reaffirms that medical staff bylaws are a binding contract that help protect the rights, duties and responsibilities of the medical staff to uphold the quality of patient care."
Little Effect on Daily Operations
There is debate on whether or not this ruling will have any effect beyond Minnesota. The MMA said the ruling "has broad implications that may be felt across the nation. The decision reaffirms medical staff autonomy and the enforceability of medical staff bylaws. Decisions in similar cases in other states have been mixed. But this strong ruling for Minnesota physicians may be used to persuade courts in future cases."
However, Minnesota Hospital Association General Counsel Ben Peltier says the ruling won't have much effect on day-to-day operations of medical staffs "for the vast majority of hospitals in Minnesota" and elsewhere.
"There are some potential concerns related to liability that comes with the fact that a medical staff is an unincorporated association and thus has the capacity to sue and be sued under Minnesota law," Peltier told me. "That has some long-term potential impact on risk and liability for all healthcare providers that practice in a hospital."
The Minnesota Supreme Court ruling cites Minnesota state law, which defines the terms of unincorporated associations. In order for the ruling to affect other states, Peltier says, "they would have to have a statute that was similar and potentially a supreme court that came to the same conclusion about a similar statute. I don't know if that portion of it is going to be nationally significant."
"There are some states that have already identified the medical staff bylaws as a binding contract. I have not seen others that have identified the medical staff as a separate legal entity or an unincorporated association that may sue or be sued as subject to law suits. That is something that hospitals around the country may take note of and need to potentially address."
Peltier says that the celebratory comments of the AMA and the MMA fail to note that the ruling affirms the right of medical staffs to sue – and be sued.
"The outcome of this case gave them a little more than they might have bargained for with respect to liability," he says. "In theory, a plaintiff's attorney could file suit against an entire medical staff for the negligence of a single member of that medical staff and individual members of the medical staff could potentially be liable for the damages awarded against another member of the medical staff."
Culture Clash
"Practically speaking, will a court allow a plaintiff's attorney to bring a claim against multiple members of a medical staff when only one was involved? Will a court enforce a judgment against an entire medical staff if it finds that one individual on the medical staff is unable to fulfill a damage award that has been levied against them?"
Although both sides in the suit repeatedly cite "patient safety" as their primary concern, the origins of the case are pedestrian. This is a turf war between established physicians at a hospital and the new owners, as Justice Anderson noted, a classic clash of cultures.
We see a lot of this with all of the mergers, acquisitions and other affiliations ongoing in healthcare. In fact, with so many egos at play it's nearly unavoidable and maybe even healthy for the overall process if some sort of clear parameters are set for physician autonomy. Clear lines of responsibility bring accountability, and that will improve patient safety.
As the Minnesota Supreme Court made clear, however, with autonomy comes liability.
Nonprofit hospitals have the right—indeed the obligation—to pursue outstanding debts. But aggressive debt collection tactics can rightly spark public backlash.
The U.S. Treasury Department this holiday week quietly released its final regulations governing patient protections from overly aggressive debt collections tactics by "tax-exempt" hospitals.
These new regulations shouldn't surprise anyone. The feds have been talking about them for years now as a component of the Patient Protection and Affordable Care Act. A cursory review shows there is nothing in the new guidelines that wasn't anticipated. For expediency's sake, read the details here.
The release of the new regs comes just days after Pro Publica published a series of devastating reports detailing the aggressive and possibly illegal debt collection practices at several nonprofit hospitals, specifically in Missouri and Alabama. The Pro Publica stories were widely read after they were picked up by mainstream media, including NPR.
Unfortunately, the actions of a few nonprofit hospitals tarnish the entire sector. In the media, you are guilty until proven innocent, and even then suspicions linger. Frankly, it would not be unfair to suggest that these aggressive practices are limited only to the hospitals identified by Pro Publica.
Are these aggressive debt collection tactics a symptom of a larger challenge facing many nonprofit hospitals? I believe so, and I am not alone.
Jill Horwitz, a professor at the UCLA School of Law, and a public health policy expert, says these new guidelines, along with ongoing Congressional investigations into care provided by nonprofit hospitals, and the redesign of the federal 990 returns "all point in the direction of requiring hospitals to provide free care for indigent patients in exchange for their tax exemption."
"I worry about that focus because non-profit hospitals do a lot of things to improve the health of everybody, not just indigent patients," Horwitz says. "There have to be trade-offs. If you require hospitals to spend more money providing free care, they are going to have to make cuts elsewhere or find ways to increase revenues. Neither of those responses are really desirable."
"Making cuts elsewhere means providing less-profitable services that a lot of people, especially poor people need and making money requires focusing on profitable services and cross-subsidizing to meet the free care provision requirement. That means doing more diagnostic imaging, more invasive cardiac treatments, and more orthopedics, which are already areas that the federal government worries that we provide too many services."
Horwitz's big picture arguments are valid and nuanced, and I hope to speak with her again in the coming year to expand on her observations.
For our immediate purposes, however, rest assured that cross-subsidizing is not what local media is going to focus on if you've got a bill collector demanding credit card swipes from bleeding patients in the emergency department.
The issue of debt collection and bill padding—particularly at nonprofit hospitals—pops up every so often. Back in 2010 nonprofits were rapped for their failure to inform patients about their eligibility for charity care. In 2013, public outrage followed a report detailing the strong-armed tactics Accretive Health Inc., a debt collection agency in Chicago whose work on behalf of its hospital clients brought down the wrath of the Minnesota Attorney General.
Clearly, healthcare billing and debt collection are issues that resonate strongly with the American public. They tap into our anxieties about our abilities to pay for healthcare, even if we are insured. This anxiety is well-founded.
AKaiser Family Foundation study published early this year found that one in three Americans has difficulty paying for medical debts. KFF data further shows that 70% of people with medical debt are insured, and that people with employer-sponsored coverage represent 54% of medical debt cases. These are the people who are playing by the rules and they're still in financial straits!
Healthcare is expensive and complex. Health insurance benefits copays and networks can be undecipherable for people not schooled in cryptology. Those entering the healthcare labyrinth are usually sick, or in pain, or tending to a loved one, and stressed out. It's almost impossible to get an estimate for what you'll eventually pay, and healthcare is still years behind retail when it comes to pricing transparency.
If you're in senior leadership, you should be able to answer these questions: What is your hospital's debt collection strategy? Are you telling your patients about their charity care options? Do you know how far your hospital will go to collect a debt? Are you demanding payment in full or threatening to dun wages, or are you attempting to work with your former patients to find a less-draconian repayment scheme?
If you contract with a debt collection service, do you know how they're attempting to collect your debts? Have you specifically told your debt collectors how far they can go in your name to pursue repayment? Have you spoken with former patients who've been through your debt collection process? Is your strategy to plead ignorance if any unsavory debt collection tactics, either in-house or through a collection service, are made public?
Always keep in mind the potential for public backlash when your nonprofit hospital fashions a debt collection strategy. Nonprofit hospitals have the right—indeed the obligation—to pursue outstanding debts. When you're fashioning those guidelines, however, don't just consider what the Internal Revenue Service might think. Envision how your debt collection practices would look if they were reported on the Five O'clock News.
