The common-sense assumption that longer waits in crowded emergency departments are bad for patients' health is bolstered by a new study.
The study, Impact of Emergency Department Crowding on Outcomes of Admitted Patients, published online this week in the Annals of Emergency Medicine, found that admission to the hospital from the ED on days with prolonged ambulance diversion or high ED crowding was associated with 5% increased odds of dying in the hospital compared to admissions on days with low ambulance diversion.
The study also linked crowding to longer hospital lengths of stay and increased costs per admission.
Lead author, Benjamin Sun, MD, an emergency physician with the Oregon Health & Science University in Portland, says the findings confirm what he had expected.
"It is something that seems to resonate with common sense, but there isn't a whole lot of evidence to support it, which is why we think this is a significant paper," Sun says.
The difference is the size and sweep of Sun's study.
"There have been studies that have looked at the relationship between crowding and outcomes. They've been limited in that they look at a roughly small number of patients or hospitals," Sun says.
"The way this differs from prior work is No. 1, we looked at a large number of patients in a large geographic area in California. In contrast, other papers have focused on the patients who were trauma or heart attacks. We looked at everybody who got admitted to the hospital."
The team analyzed 995,379 ED visits resulting in admission to 187 hospitals in California during 2007. Daily ambulance diversion was the measure of emergency department crowding.
Findings
Patients who were admitted on days with high emergency department crowding had .8% longer hospital stays and 1% increased costs per admission. Periods of high emergency department crowding were associated with 300 excess inpatient deaths, 6,200 hospital days and $17 million in costs, the study found.
"Our findings are robust," Sun says. "Every way we sliced the data it showed that the system is such that if you came into the hospital on a really busy day and you were admitted you had a higher rate of death than if you were admitted on a day when it wasn't so busy."
Although a trip the emergency room is not something that individual patients can pencil in, Sun says that hospitals should be able to track ebb and flow in their EDs.
"For most hospitals the number of patients who need to be admitted from the ED is a very predictable thing," he says. "What the profession has learned over the past 10 years of research is that ED crowding is driven by the availability of inpatient beds. When you say ‘ED crowding' it is a symptom of a problem somewhere else in the hospital."
"This is something that leaders in hospitals are increasingly aware of," he says. "Folks who run hospitals are trying to figure out how to reduce the boarding of admitted patients in the ED and how to improve the through-put of the patient in the inpatient side."
Solutions to ED Crowding
Sun says the American College of Emergency Physicians has guidelines that could help hospitals alleviate ED crowding and boarding. He detailed three recommendations "that seem to be very effective although the political will to implement these might be challenging."
1.Manage Flow
For starters, he says there needs to be someone in the hospital whose job is to manage inpatient flow.
"One common name that is given is the bed czar," Sun says. "This is either a physician or a nurse manager who is always monitoring the availability of inpatient beds. This is across all services but usually medicine and surgery are the two major services you have to watch out for."
"This may require the bed czar to know how many patients are getting elective procedures because those patients are guaranteed to require a bed after the operation. Have one person or a few people who are given the responsibility of knowing what is going on throughout the hospital so they can facilitate through-put, making sure beds are turned over as quickly as possible, making sure of their known bed needs, that the hospital is prepared for that."
2.Spread Out the Boarders
Another solution is to spread the burden of the overcrowded ED throughout the hospital.
"In a lot of the hospitals I've worked at, when the hospital is crowded you just board a bunch of patients in your hallway. You may have multiple patients in stretchers who in theory are admitted, but because there is no place to put them, they just fill up the hallway in the ED," Sun says.
"What's so special about the ED hallways? Spread these patients out throughout the hospital."
3.Control 'Artificial Variation'
A third suggestion that Sun called "the most effective, but also the most difficult," involves controlling "artificial variation."
"The numbers of patients who are admitted from the ED is like clockwork. It's very predictable. That is natural variation," Sun says.
"Artificial variation is when you have different needs for hospital beds that are based on things that physicians in the hospital can control. For example, let's say the surgeons in your hospital decide to do all their surgeries on Monday, Tuesday and Wednesday. On those days you are going to have a tremendous backup because all the inpatient beds are going to be taken up by post-surgical patients. Then for the rest of the week you then have oversupply of beds because those post-surgical patients are discharged and you have an excess of inpatient beds. Spread out the surgical schedule over an entire week."
Although the affects of healthcare reform on ED crowding were not addressed in the study, Sun was asked to speculate.
"That's a complicated question. Nobody really knows," he says. "It could make boarding worse because now that more people are going to be insured they will use the hospital more so that might contribute to ED crowding. We've seen this happen in Massachusetts where the expansion of insurance to pretty much the entire population at the least has not helped ER crowding and it probably has increased the volume of people who go to the ED."
"On the other hand, it might help in the sense that there are payment reforms going on and there is a big push to try to figure out how to keep patients out of the hospital. Right now it is really unknown. It could affect in both directions and nobody knows until we actually go to it."
Hospital groups and other providers this week intensified their campaigns to protect Medicare and Medicaid from drastic funding cuts that could be considered in the weeks ahead under the so-called fiscal cliff negotiations.
The American Hospital Association on Wednesday unveiled the results of its survey taken Nov. 13-15 which showed that 69% of the 800 registered voters queried—regardless of their party affiliation—oppose funding cuts to Medicare and Medicaid.
Specifically, survey respondents were asked if they would support or oppose a proposal to reduce Medicare and Medicaid funding for hospitals by more than $70 billion over 10 years, as has been proposed in the deficit reduction talks.
Of the 31% of the respondents who pointed to spending and budget issues as one of the two most important issues facing the country, 71% oppose reducing federal spending for healthcare, the survey showed.
"Nearly seven out of 10 voters reject cutting hospital funding for Medicare and Medicaid services and voters believe that if funding were reduced then access to services would decrease," AHA Executive Vice President Rick Pollack said in a conference call with reporters on Wednesday.
"We know that as part of the fiscal cliff discussions, Congress could further cut hospital funding to reduce the deficit. It is our view that these cuts would have serious implications for patients and could jeopardize access to quality care."
"It reinforces all the points we have been making about why people should be very cautious about looking at these kinds of options," Pollack says.
"It exposes a gap between what people on the policy side are looking at versus what the public is willing to accept. This just reinforces all of the messages that we’ve been sending during the lame duck [session] and presumably for the remainder of the year as they continue to grapple with these issues."
On other fronts, a broad coalition of 20 associations representing Medicare recipients, hospitals, nursing homes, and other providers sent a joint letter to President Barack Obama and Congressional leaders urging them to protect provider assessments from the budget axe.
The letter warned that cutting or eliminating Medicaid provider assessments would do little to reduce healthcare costs but would threaten access to quality care for seniors, children, individuals with disabilities and low-income families.
"Cutting provider assessments hurts patients," National Association of Public Hospitals and Health Systems President/CEO Bruce Siegel, MD, said in a media release accompanying the letter. "Congress and the administration must recognize that limiting this crucial funding stream will shift costs onto states—costs that will trickle down to providers and, ultimately, to millions of beneficiaries who rely on Medicaid."
Provider assessments allow states to generate revenue and federal matching funds for Medicaid. The assessments allow for expanded coverage and benefits and increased reimbursement rates. Recent budget proposals have suggested reducing the provider assessment threshold from 6%, or eliminating the program altogether.
Also this week, NAPH launched an advertising campaign that features short videos and related research designed to educate policymakers and the public about Medicaid's value to patients and the economy.
The advertisements stress the value of Medicaid coverage to the health of the more than 60 million people in the program, mostly children, women and the disabled.
The campaign also highlights Medicaid's value to state and local economies by keeping workers healthy and on the job and contributing to job creation and other economic activity in healthcare and related sectors.
"Medicaid is not only good for patients, it's good for communities," Siegel said in a media release announcing the campaign. "The evidence clearly shows the personal health and financial benefits of the program and its efficiency compared with private insurance and Medicare. But beyond its obvious benefits to health, Medicaid injects economic life into communities and states."
Safety net hospitals drive nearly 800,000 jobs nationwide and pump about $120 billion into state economies. Even modest cuts to Medicaid put hundreds of thousands of jobs at risk and would bleed billions of dollars in federal support to states.
Such a loss of funding would force states to turn to taxpayers for additional revenue and likely would result in hospitals ending or scaling back important community services, such as specialty care clinics, NAPH said.
The AHA survey did not ask the respondents how they would pay for the continued funding for Medicare and Medicaid.
Bill McInturff, a partner and co-founder of Public Opinion Strategies, which conducted the survey, told reporters in the teleconference that other surveys he has done recently suggest that the public would support across-the-board income tax increases before they would support cuts to Medicare and Medicaid.
"They really believe there are other options that they would support long before they would get to changes in Medicare and Medicaid, one of which would be raising taxes on people who make more than $250,000," McInturff says.
"It reflects the public’s unwillingness to want to make this change until and unless they believe lots of other things have been done first as regards to where they think these funds should come from. Voters have been very resistant to raising retirement ages and increasing taxes. Most of what has been discussed for the public policy solution does not have significant voter support."
The AHA survey found that opponents of Medicare and Medicaid funding cuts include:
74% of Democrats, 58% of Independents, and 69% of Republicans;
63% of men and 75% of women;
71% of whites and 64% of voters of color;
70% of voters under age 35, 63% of voters age 35-44, 73% of voters age 45-64, and 67% of seniors; and,
More than three-in-five in every region of the country
Even though the poll shows that the public does not want Congress to cut Medicaid and Medicare funding, Pollack says the programs are too big to ignore.
"A lot of that just comes down to the size of the budget," Pollack says. "When you look the whole budget and the fact that Medicare and Medicaid combined represent a big portion of federal spending, it immediately gets into the discussion in a significant way. It’s as simple as that."
The survey also shows that the public holds hospitals in high regard, with two-thirds of respondents saying they held a favorable views, and one-third have "very favorable" views of hospitals.
Only 9% of survey respondents said they had an unfavorable view of hospitals, and 21% largely said they have a mixed or half-and-half opinion. That high regard for hospitals extended across party lines, 66% of Republicans, 62% of Independents, and 70% of Democrats saying they held a favorable impression.
In stark contrast, separate polls have shown that Congress has some of the highest unfavorable ratings in its history. Averaging approval ratings of about 16%, Congress is about as popular in the United States as Fidel Castro, Hugo Chavez, and Paris Hilton.
HealthLeaders Media extends congratulations to James J. Bleicher, MD, president and CEO of Verde Valley Medical Center in Cottonwood, AZ.
Bleicher is the 2012 winner of the American Hospital Association's Shirley Ann Munroe Leadership Award, which recognizes the feats of small hospital leaders who have improved healthcare delivery in their communities.
AHA has cited a number of achievements at the nonprofit, 99-bed VVMC since Bleicher, a hospitalist, became CEO in 2009. They include collaborative health initiatives with community physicians, school districts, and an academic center designed to improve community health and access to healthcare, particularly for underserved groups that include Native Americans, Latinos, the uninsured, the elderly, and those with no access to primary care.
Under Bleicher's leadership, cancer treatments are available in the North Central Arizona region that VVMC serves as part of the Northern Arizona Healthcare system. VVMC has also embraced telemedicine and other remote communications that allow for programs and services that include research trials and tumor boards led by expert clinicians.
AHA says the success of VVMC under Bleicher's tenure is measurable. When he became CEO, VVMC's Hospital Quality Alliance measures averaged 65%. Three years later they are average 92%.
VVMC has had no central line infections for three years and no ventilator-assisted pneumonia for four years. Employee engagement has increased from the 18th percentile to the 90th percentile.
Bleicher recently spoke with HealthLeaders Media about his success at VVMC.
HLM: Why did you win this award?
JB: "It was a team effort. We started off as a whole hospital concept and it became our culture. It was involving everybody including the community, all the staff, all the physicians. It really made a difference for this hospital and community, which is the one of the most important things, especially for a smaller community.
Hospitals have to understand that symbiotic relationship; us being the largest employer in town and being in an Arizona retirement community. People will move to a retirement community if they have great healthcare and we put that together for everyone and delivered some results that really made a difference."
HLM: What did you change that allowed VVMC to flourish?
JB: "It was the measure of focus. It wasn't about me or them. It was about all of us. It was about the community. It was about the patient. A lot of places talk about putting the patient at the top of the pyramid and doing everything for them but we really live that.
Every decision we make was based on something for the patient; quality, service, safety, and that is how we based our decisions. That permeated throughout the hospital. Every worker understood that.
When we had forums with the staff, I'd say 'look there is a reason why I'm not talking about finances first because that is not the most important thing.' Every hospital talks about 'no margin no mission' but we really put quality and safety and service above finances appropriately to make the changes. It is easy to get healthcare workers to rally around that because it means something to them."
HLM: What changed at VVMC when you took over as CEO?
JB: "We had a strategic planning meeting with the board about the time I was transitioning from chief medical officer to CEO. They came out of this big session with a big (Strengths, Weaknesses, Opportunities, and Threats) analysis which said that people weren't nice, service wasn't good, quality was low, the community doesn't think we have a good product.
They said 'let's go out and develop service lines and new marketing.' I basically said 'OK,' and then transitioned and said 'no we aren't going to do that. We need to improve all of these other things first. It matters much more.' So it was a 180-degree turn really from where we were going before."
HLM: What special skills are needed to be an effective leader at a smaller hospital?
JB: "It is imperative that you are—and it sounds cliché—a man or a woman of the people. That includes all of the constituents of the hospital as well as the community. It means trying to walk a day in their shoes. I spent a lot of time just walking around, being in different departments and in different areas of the community. Not there to preach or orate, but to listen and get to know people on a personal level.
That is an advantage in a smaller hospital. I have about 800 employees in total and I may not know all their first names but I recognize all of them, talk to all of them, have conversations about their children, about the community, about sports, or whatever happens to be their interest.
But it's about their interests. Not 'Hey I'm Dr. Bleicher, CEO. What are you doing for me?' It was totally flipping it. Obviously if you have 5,000 employees that makes it a lot more difficult. But if you only have 800 you need to do that."
HLM: How has being a physician affected your role as a hospital leader?
JB: "I have to be careful because the people who read this who aren't physicians will say 'wow what the hell does he think?'—but you are running a hospital. There are conversations in every board meeting and staff meeting that involve care, that as a physician I understand at a much deeper level having been a practicing physician.
I can have those one-on-one conversations with a cardiologist or a general surgeon or an internist about what the call or the case is like. When I say we are going to put quality and safety first I can really mean it.
Obviously that is a trend nationwide. There are more physicians running hospitals whereas 20 years ago you had maybe one at Cleveland Clinic and a few academic medical centers. Now people are saying 'well hey it kind of makes sense if you have the right person.' It doesn't mean that every physician should be a CEO, obviously."
HLM: How do you see healthcare reform affecting your hospital?
JB: "It's going to become more of a community asset. We have to work together with limited resources in the community and get the job done together. We are trying to work more closely with the school district and other volunteer groups that normally have nothing to do with the hospital.
We need to be the conduit for all of that and bring everyone together if we are going to improve the health of the community. We can't do it alone. They can't do it alone. We need to do it together. It's going to tighten that relationship even more."
HLM: Will VVMC be part of any mergers or acquisitions?
JB: "The board has evaluated that several times and at this point they don't see an advantage in doing that. But they are always watching to see what is out there and what makes sense.
Because we are so rural and distant from a big city—we are 100 miles north of Phoenix—there may not be that many economies of scale. But the board is keenly aware and every couple of years re-evaluates it."
HLM: How can other hospital leaders emulate your success?
JB: "First, you have to be true to yourself and do what is right for the patient. If you're doing what is right for the patient good things will happen. It simplifies the process. A lot of people say it but they don't necessarily live by it.
You have to put the accountability and all of the processes behind that but when you do it makes decisions a lot easier. Does this make sense for the patient? Whether it is an operational thing or an efficiency thing in the past you'd say 'it makes sense for the nurse or doctor, but look what it's doing for the patient.'
Then you'd say 'we'd better switch back.' But if you are truly doing it with the patient in mind it does make decisions easier. There are things you wouldn't see before because of your own personal biases. If you're a nurse or a doctor or a tech or an administrator you'd think things should go this way but if you follow the patient path it becomes more efficient."
The patient safety movement has made the healthcare workplace safer for employees too, a risk analysis suggests.
"We think the intense emphasis on patient safety has a direct implication on worker safety," Martha Bronson Posey, senior consultant and actuary with the Actuarial & Analytics group within Aon Global Risk Consulting. "The patient and worker safety programs share a lot of the same characteristics. So if your environment is safer for your patients it is inherently safer for your workers."
Aon projects that healthcare systems across the nation will experience an annual loss rate of $.79 per $100 of payroll in 2013, which continues the stability that has been in place since 2008. That loss rates will continue to increase at a 1% annual rate.
Posey says the stability in workers' compensation loss rates is linked to the decrease in claims frequency, which has experienced a steady decline over the past decade.
In addition to patient safety programs, Posey says the decrease in workers compensation claims frequency could be credited to new technologies, including beds and patient lifting devices.
In addition, low nursing staff turnover in a weak economy has meant the retention of more experienced and competent staff. "So the recession in the economy has had an impact. The average experience and competency has risen, so we are seeing that as a driver for claims frequency decreasing," Posey says.
The biggest source for healthcare sector workers compensation claims revolves around patient handling.
"Workers compensation is in every industry but because of the unique exposure of healthcare workers you don't have other environments with patient handling," Posey says.
"I did the research and some lifting injuries and patient handling injuries can be more costly than some of the injuries you see in the construction and manufacturing industries. We realized from the survey that that was the No. 1 issue of the risk managers. We looked and 25% of the claims were attributed to some sort of patient handling risk. It is a considered a top concern and that concern is warranted."
Posey says risk managers in healthcare settings cannot simply assume that their workers are using patient lifting devices. "We are hearing about some of the pushback where ‘it is so cumbersome to use it' or ‘it's not where I need it to be.'"
"Risk managers want to know ‘are my employees using this?' They have this lifting device available. It's assumed that it is being used, but is that the case? The report was interesting in that risk managers need to dig a little deeper on their own to see how it is working in their facility."
Posey says she was surprised to learn that two-thirds of the survey respondents either do not have a return-to-work program or a way to test the effectiveness of their return-to-work program.
"Without a measure of efficiency and effectiveness, the health and productivity of the workforce is suffering," she says. "It has been illustrated time and again that return-to-work programs keep business and premium costs down as well as benefit injured workers. It's a win-win for both the healthcare system and the injured worker."
"If someone is injured on the job bring them back on light duty and into work rather than just continue to pay out indemnity as they sit home and recuperate," she says. "Bring them back to work and put them on light duty as they continue to recover."
While claims frequency has declined, claims severity including medical, indemnity and expense costs, has been steadily increasing, and projected to continue at a rate of 2% per year. Posey says the increase is linked primarily to outside influences such as the weak economy that has made it more expensive to close outstanding workers compensation claims.
As millions of American consumers re-enroll for healthcare coverage in 2013 and grimace over interminably rising costs, provider associations, retailers, drug makers, and health plans are trying their best to deflect responsibility onto one another.
By various estimates, the nation's workers may receive compensation increases averaging between 2% and 3% in 2013. However, health insurance costs are projected to increase by 5% –6%.
Although that is the lowest increase in premiums in six years, it's a decades-long trend, and rising healthcare costs have been blamed as a key factor in wage stagnation. As the discontent among consumers grows, the major players in the healthcare sector have become increasingly adept at making sure they don't get pegged as the bad guys.
The Express Scripts 2012 Q3 Drug Trend Quarterly issued last week stated that prices in a market basket of the most highly used brand-name medications increased 13.3% over the year ending September 2012, far outpacing the 2% inflation in the larger economy. At the same time, generic drug prices fell 21.9%. Express Scripts says the 35.2% point net inflationary effect is the largest widening of brand and generic prices since it began tracking in 2008.
"The patent cliff has fueled a growing price disparity between brand-name and generic medications," Express Scripts CMO Steve Miller, MD, said in a media release. "The trend emphasizes the nation's continued need for the tools we employ to help patients make better decisions, including generic use when appropriate."
America's Health Insurance Plans flagged the Express Scripts report and issued its own press release.
"To make healthcare coverage more affordable, the nation must address the soaring cost of medical care, including prescription drug prices, which continues to increase at an unsustainable rate. Health plans are working with providers and consumers to help control rising costs through a variety of innovative ways, such as increased utilization of lower-cost generic drugs," AHIP said.
These attacks on drug prices prompted a quick response from the Pharmaceutical Research and Manufacturers of America.
"By cherry-picking a subset of specialty medicines used by a small number of patients, Express Scripts gives a misleading impression of prescription drug spending," the drug makers' lobby said. "While representing a small share of overall health spending, some of these medicines represent the newest and most innovative therapies, giving hope to patients who previously had few treatment options."
Earlier last week, the American Medical Association issued its annual report detailing what it says is a widespread lack of competition among health insurers across the nation.
"The new data demonstrate that most areas of the country have a single health insurer with an anticompetitive share of the market," AMA President Jeremy A. Lazarus, MD, said in a media release.
The lack of competition among insurers, AMA says, has resulted in increased premiums, watered-down benefits, and increased insurers' profitability, which the physicians' association says demonstrates that highly concentrated markets harm patients and physicians.
"Families and employers in every state have multiple choices of both insurance plans and types of coverage. Moreover, research clearly demonstrates that provider consolidation—not concentration of health plan markets—is driving up healthcare costs for consumers and employers," AHIP said in the statement.
Last week was particularly busy for AHIP. In addition to glomming onto the Express Scripts report and calling out as "fatally flawed" the AMA report, AHIP made public its November 21 amicus brief filed in the Court of Appeals for the Sixth Circuit in support of the Federal Trade Commission, which had challenged the merger of two hospitals in Ohio.
"Anticompetitive hospital mergers harm consumers by leading to higher prices and diminishing hospitals' incentives to innovate and improve quality," AHIP wrote in the brief. "Health insurance plans bring a unique and important perspective to the antitrust review of hospital mergers. They represent millions of individual consumers of healthcare and as such are a relevant customer whose insights and experiences are important to the antitrust review. Health plans have been directly affected by anticompetitive hospital mergers. It is the health plans who may be forced to accept higher prices and who may lose their ability to implement innovative approaches to improving quality."
"And of course," AHIP continued, "anticompetitive hospital mergers have also affected health plans' members. The individuals and employers who receive insurance from health plans, or who self-insure with their assistance, have seen tremendous increases in prices without corresponding increases in quality as a result of anticompetitive hospital mergers."
The federal appeals court has yet to assess blame.
Health plans and physicians pointed fingers at one another this week, with each side blaming the other for market consolidations that they both claim are driving healthcare costs.
However, impartial observers say both sides are to blame and consumers are bearing the cost.
The American Medical Association on Wednesday released the 2012 edition of Competition in Health Insurance: A Comprehensive Study of U.S. Markets. The physicians' association says the report shows widespread anticompetitive health insurance markets in most regions of the country for point-of-service plans, health maintenance organizations, and preferred provider organizations. The report details commercial health insurance market shares and market concentration levels for 385 metropolitan areas in 50 states and the District of Columbia.
"The broad scope of the new AMA analysis provides the most complete picture of the consolidation trend in health insurance markets," AMA President Jeremy A. Lazarus, MD, said in a media release. "The new data demonstrate that most areas of the country have a single health insurer with an anticompetitive share of the HMO, PPO, or POS market."
The release of the AMA report prompted a swift rebuttal from America's Health Insurance Plans. The health insurance industry's lobbying arm published a statement on its website Wednesday that called the study's methodology "fatally flawed" and laid the blame for rising healthcare costs on provider consolidations.
"Families and employers in every state have multiple choices of both insurance plans and types of coverage. Moreover, research clearly demonstrates that provider consolidation—not concentration of health plan markets—is driving up healthcare costs for consumers and employers," AHIP said in the statement.
Mark Pauly, a healthcare economist at the Wharton School at the University of Pennsylvania, says both sides are correct. "Insurance markets aren't very competitive and healthcare services markets, particularly hospital markets, are not very competitive," he says.
"It's like two devils pointing the finger at each other from the point of an economist interested in competition, but they are both right. In economics, we have a name for the situation where you have a monopolist buyer and a monopolist seller. It's called bilateral bargaining, and consumers are left in the middle. So it's doubly bad for consumers."
That sentiment was echoed by Anthony Wright, executive director of Health Access California, a consumer advocacy coalition.
"This is one of those rare cases where I agree with both sides, just probably not the way either of them wants," Wright says. "Clearly, provider consolidation does have an impact on healthcare costs, but so does the consolidation in the health insurance market. That is true at the insurer level and the provider level. When a provider has such a huge foothold in a given market, then every insurer to do business in that area has to contract with that provider and they are in a privileged position to demand a higher reimbursement, which is reflected in cost."
"At the same time, if there are only a couple of prevalent insurers in a market, like Kaiser and Blue Cross and Blue Shield in California, there is not the robust competition to bring down prices. You need to look at other means of looking at rates, including more vigorous rate review and regulation."
On the health plan side, Pauly says the dominance of the insurance markets has existed since World War II, while the consolidations on the provider side are more recent phenomena.
"There has been a tendency more worrisome to economists that hospitals have been consolidating. That has been more of a change," he says. "The insurance market has been bad but it is not getting worse. But the provider market is getting worse, and on top of hospitals consolidating in many cases, now large physician groups like the orthopedic surgeons are organized into a few large groups that probably also aren't as competitive as they would be if they were individual doctors that insurers could play off of one another."
Pauly says the best solution would be to break up the monopolies, but that probably isn't going to happen. "The next solution, which is probably where we are more likely to go, is to control or regulate the monopoly," he says. "The rules in the Affordable Care Act about minimum medical loss ratios are an attempt to get insurer profits and excess profits down by regulation. Medicare is big enough that it can push doctors and hospitals around, and the hope is that these new health insurance exchanges will somehow convert a whole bunch of insurance midgets into a giant that will somehow be able to deal more effectively with healthcare providers."
The AMA study found:
A significant absence of health insurer competition in 70% of the metropolitan areas it studied. These markets are rated "highly concentrated," based on the 2010 Horizontal Merger Guidelines issued by the U.S. Department of Justice and Federal Trade Commission.
In 67% of the metropolitan areas studied, at least one health insurer had an HMO market share of 50% or greater.
In 68% of the metropolitan areas, at least one health insurer had a PPO market share of 50% or greater.
In 68% of the metropolitan areas, at least one health insurer had a POS market share of 50% or greater.
The top 10 states with the least competitive commercial health insurance markets are (in order): Alabama, Hawaii, Michigan, Delaware Alaska, North Dakota, South Carolina, Rhode Island, Wyoming, and Nebraska.
"It appears that consolidation has resulted in the possession and exercise of health insurer monopoly power," the study says. AMA says those monopolies have increased premiums, watered down benefits, and increased insurers' profitability, which the physicians' association says demonstrates that highly concentrated markets harm patients and physicians.
Pauly says he'd be more sympathetic to the complaints of physicians if they "are willing to break up some of their doctor market power as a quid pro quo."
"Of the two kinds of non-competitiveness, I'm more worried on the non-competitiveness on the seller of services side than on the insurers' side, because insurers can be replaced fairly easily," he says. "There is nothing special about a Blue plan other than some consumer loyalty to the trade name. But there is something special about your own doctor, and hospitals are not so easily interchangeable."
Wright believes the AMA study and the AHIP response inadvertently say more about what is wrong with healthcare delivery than the two sides' accusations and counter-charges about monopolistic practices.
"The sad part is that our healthcare costs are more dictated by the healthcare market than they are the actual delivery and quality of care," he says. "Healthcare prices and healthcare premiums are much more a function of the providers' and insurers' relative market positions than they are about the cost of providing care of the quality of the care provided. Under our current healthcare system, that is what dictates our prices more than cost and quality, which are the things that people would presume would dictate the costs."
Rural healthcare concerns usually don't top planning agendas for politicians and policy wonks at state and federal levels. They're more interested in bang for the buck.
"If you are at the state and national level, the focus is on ‘Where can I make the biggest difference most quickly if my goal is related to quality or cost savings?'" says Prof. Keith Mueller, who leads the University of Iowa's Department of Health Management and Policy. "So of course you are going to gravitate towards the biggest population concentrations because ‘I can make the biggest splash there first.'"
As a result, the special needs and smaller economies of scales that rural providers face can often get shoehorned into programs and policies designed for larger urban settings.
"I wouldn't call it an afterthought. I'd call it a lack of awareness," Mueller says.
With that awareness gap in mind, the National Rural Healthcare Association formed the Rural Health Foundation in September with $110,000 in seed money that was donated by individuals, with some help from NRHA. As the foundation evolves in the coming months and years, it will provide funding for scholarships, seminars, and other training opportunities for rural healthcare providers and administrators to give them the know-how to adapt national healthcare policy into rural settings.
"The foundation will generate funds that can help in what I would call the continuous training and education for leaders at the local level in rural America who are helping to manage the transition in healthcare delivery and finance," says Mueller, who is a co-chairman of the foundation.
The foundation will address such questions as "How do we adapt to those changes when the scale of the system is somewhat different? Instead of a 600-bed hospital, you are talking about anything from six inpatient beds to maybe into the lower hundreds of beds. How do you take an insurance plan payment change that is based on what they have learned from large hospitals and adapt that to the small hospital?" he says.
The foundation will also help rural healthcare leaders identify and tap into the "natural assets you have locally and use those well in healthcare delivery," Mueller says."In a local rural community you are closer to the population that is being served. Changes that focus around keeping populations healthier take on a different feel when it's a smaller population where people know each other and the providers are closer to the population. There are ways to use that as an asset to implement what the payers want, which is keeping people out of the most expensive forms of acute care because they are getting better services and staying healthy in primary care."
Some of the operational details for the foundation have yet to be finalized. For example, there is no annual budget or locked-down funding source beyond the seed money.
NRHA CEO Alan Morgan says that creating a separate foundation provides a locus that could otherwise get blurred with all that is going on in rural healthcare. "For us at NRHA, we do educational programming, networking, advocacy. There are a lot of activities within the broader nonprofit parent organization, and we wanted to make sure for the purposes of the foundation that the goals and expectations were very targeted toward leadership development," he says. "We felt that creating this separate entity would ensure that that will be able to happen."
Mueller calls NRHA's involvement "exciting," adding that "the affinity between a foundation focused on rural health leadership and its roots in the leading voice for rural America in policy issues will be tremendously beneficial."
Mueller says eligibility standards for foundation scholarships and other awards will likely be "very open and inclusive"—from CEOs to clinicians to middle managers.
"We need to be inclusive, because you are talking about the objectives in healthcare delivery, which include better care at lower cost and better health for the population," he says. "With those overarching goals, you have to be flexible and open about who plays key roles, particularly for that better health objective in the community."
So how will we know if the foundation is a success?
"As all foundations do, we will track the participants as we go forward," Morgan says. "The people involved in these leadership activities, how do they translate that into success in their communities? And how do we translate that at a national level? How do we cultivate these leaders so they can be the future spokespeople for improving access to healthcare in rural America?"
With the training and expertise that rural providers attain with foundation support, Mueller expects that they will become strong advocates for rural healthcare at the state and national policy-setting level.
States that expand their Medicaid rolls under the Patient Protection and Affordable Care Act would see only modest increases in their share of the costs when compared with the windfall in federal funding that would come with it.
That's according to a new report released Monday by the Kaiser Family Foundation that also suggests that some states could net budget savings under the expanded Medicaid rolls, as millions of poor and uninsured people gain coverage.
According to the analysis, which was written by the Urban Institute for KFF's Commission on Medicaid and the Uninsured, if all 50 states expand their programs, state Medicaid spending nationally would increase by $76 billion from 2013 to 2022, an increase of less than 3%.
For the same period the federal Medicaid match would increase by $952 billion, or 26%. With the expansion, an additional 21.3 million people could gain Medicaid coverage by 2022 and with other coverage provisions of the PPACA that would cut the uninsured by 48%.
Alan Weil, executive director of the National Academy for State Health Policy, told reporters in a KFF conference call Monday that the funding for the Medicaid expansion has to be put into its proper context.
"We are talking about healthcare and healthcare is expensive," Weil says. "It's fairly easy to have a little sticker shock at the potential costs of various policy options in this area. But what this report does very effectively is place the spending burden that states would face if they choose to expand Medicaid in the context of overall spending."
"Many states will be surprised at the results showing that the cost to them of the coverage expansion in the Affordable Care Act comes largely from things they must do, and that the choice about expanding Medicaid is a very small share of the ultimate cost that states may face," Weil says. "But that finding is also a reminder of the importance of not just looking at total cost but disaggregating where they come from. Many states, when they talk about potential costs of Medicaid expansion, are actually lumping together all costs and not just looking at the effect of the expansion."
When the U.S. Supreme Court upheld key provisions of PPACA last June, it also struck down as overly coercive the federal government's demands that states expand their Medicaid rolls. Resistance to expanding the rolls, particularly among Republican governors, reached a crescendo in July when Texas Gov. Rick Perry sent a letter to Health and Human Services Secretary Kathleen Sebelius. Perry, who was running for president at the time, explained that the Lone Star State stood "proudly with the growing chorus of governors who reject the PPACA power grab. ... Neither a state exchange nor the expansion of Medicaid under the Orwellian-named PPACA would result in better patient protection or in more affordable care."
President Barack Obama's reelection may have caused some governors' to reconsider their options. But many Republicans see the Medicaid expansion as merely throwing good money after bad to fix a dysfunctional program.
"Even President Obama has recognized Medicaid is broken," says Mike Schrimpf, spokesman for the Republican Governors Association. "For many states, placing more individuals into a broken system would be like adding more passengers to the Titanic. And regardless of whether it's federal dollars or state dollars, taxpayers are still on the hook."
Weil concedes that even a 1% increase in Medicaid spending could prove difficult for a lot of states that are still recovering from the recession. "States have not fully recovered, even though the trend lines now are quite positive in the majority of states," he says. "But it means there is a lot of deferred attention to other priorities like education, infrastructure, and public safety that have been lining up for years. So even though the relative shares are small, the absolute demands on state governments are quite substantial."
Drew Gonshorowski, a policy analyst in the Center for Data Analysis at The Heritage Foundation, says the report is hobbled by "the uncertainty around how much savings you can expect from your uncompensated care reduction at the state level."
"The study is assuming right away a 33% reduction in state spending on uncompensated care for the uninsured as a result of the expansion. They claim that is a lowball estimate but there isn't any research that exists that shows that will be the case, or anywhere near the case," he says. "So ultimately this study hinges on that being true."
Gonshorowski says governors and state lawmakers—who unlike Congress have to balance their budgets every year—should be concerned about the long-term effects of the expansion on their budgets.
"Even in some of the more friendly state-specific estimates on the expansion, a lot of states are seeing cost even as early as 2019," he says. "You have this case where the states see the expansion as a great deal because the federal government is picking up almost all of the bill in the early years. But when the rubber hits the road, they are going to start paying for the expansion in the long run. Then the question is, can the state actually pay for the expansion at that point?"
However, Richard "Buz" Cooper, MD, director of the Center for the Future of the Healthcare Workforce at New York Institute of Technology and a Senior Fellow in the Leonard Davis Institute of Health Economics at the University of Pennsylvania, says the assumptions in the report are "reasonable."
"Costs at the federal level will be larger than I believe are generally being considered: $800 billion plus the costs of insuring those individuals who leave Medicaid (in states with eligibility levels above 138% of poverty) in the exchanges," Cooper said in an email exchange with HealthLeaders Media.
"I don't believe that those costs are in the report, and I expect they would be hard to calculate, since I don't think that we know the premium for policies in the exchanges or the amount of federal subsidy that will be provided. This is not my area of expert knowledge, but the REAL number is Medicaid + subsidies for old Medicaid patients in exchanges + subsidies for others in exchanges. What we know now is that it's going to be a lot more than $800 billion."
Weil also acknowledged that governors and state legislators are justifiably concerned that a fickle Congress could go back on its promises to fund the expansion, which would leave states holding the bag.
"These estimates are built around a financing model that is in current statute, and that is the appropriate model to use. But states are very nervous about the possibility of those formulas changing," he says. "Although it is possible that states can change their mind and adopt the Medicaid expansion at one point, and then if the federal funding becomes more limited they can reverse that position, that is a painful course of action and states really do want to be able to plan ahead. So the sooner we can come to closure on whether or not the financial arrangement in the Accountable Care Act is going to be stable, the easier it will be for states to make decisions in the long run."
Gonshorowski says that shifting the cost of Medicaid to the federal government really isn't much of a long-term solution. "All the expansion is going to accomplish is a massive expansion of federal spending and a shift in cost from the states to the federal government," he says. "Even in this most recent study, you're looking at $1 trillion in spending—$950 billion of which is federal spending. That is a massive increase in federal spending."
In the end, however, Weil says the Medicaid expansion isn't just about the numbers.
"We all know that this is far more than a fiscal exercise, and looking at the cost in the context of the numbers [of people] that would gain coverage is critical," he says. "We know that being uninsured leads to excess illness burden and premature death. We know that many states for decades have been working using either their own funding or options provided by the federal government to try to reduce the numbers of people who don't have health insurance. So while figuring out the cost of this policy is very important, there is a human dimension that needs to be part of the discussion far beyond the dollars."
New proposed rules for wellness programs that were released last week under the Patient Protection and Affordable Care Act don't break much new ground, but they will likely provide the framework and clarity that will encourage more employers to participate, observers say.
"It's a good starting point," says Stephanie A. Mills, MD, president and CEO of Baton Rouge, LA–based Franciscan Health and Wellness Services, Inc. "It's the floor, and maybe a few walls, [and] some more structure and definition. I believe that it can be instrumental in providing clarity for the path forward for employers and decreasing that anxiety to jump into this by addressing the top concerns that employers have."
Within the overall framework of the wellness program guidelines, Mills says she has so far found "no major surprises."
"Overall, for those of us who are supporting wellness programs, this is well in line with the best-practice approach," she says. "There are pros and cons, as there are with any new regulations, and we will learn more as we go into the details, but at first glance it seems to be a positive for employers and individuals."
In particular, Mills supports the clarity around the outcomes-based incentives for metrics. "That will be very welcomed by employers and will drive participation. It diminishes a lot of the anxiety that employers are feeling around discrimination and what sorts of limits should we have around the incentives and what parameters."
For employers, the proposed rules increase from 20% to 30% the maximum permissible reward for the cost of health coverage, and increase the maximum reward to up to 50% for tobacco cessation programs.
"I don't expect a lot of employers will rush to impose 50% penalties on smokers or 30% penalties on somebody who doesn't get their cholesterol under control," says Roger Reed, senior vice president, clinical services at wellness services provider Health to You, a subsidiary of HCA. "It's just another way to say to the consumer, 'Look, we are going to let your employer impose incentives but we are going to cap it so this is as far as they can go.' In working with employers across the country, we aren't seeing a lot of people saying, 'Boy, when these rules come out, we are going to hammer our employees with these incentives.'"
For individuals, the proposed rules require that the wellness programs and their incentives be laid out simply so that participants can understand them, and that protections and appeals processes are in place for individuals who have legitimate reasons for failing to meet specific metrics.
"They have to accommodate the consumers who can't meet the standards," Reed says.
Brenda L. Rooney, medical director for Community and Preventive Care Services at Gundersen Lutheran Health in La Crosse, WI, says the federal government was smart to require no baseline incentives for wellness programs and to impose a reasonable ceiling for those incentives.
"Incentives are good but they are not the be-all and end-all. Incentives can backfire on you as well," she says. "That there is a limit is probably good. People start to expect incentives and then they tend to use the incentives to reward a behavior change. Pretty soon, if you to pull the incentive away, will the behavior change go back to the beginning?"
Rather than relying too heavily upon incentives, Rooney says wellness programs should focus on changing the environment so that it supports positive outcomes, such as banning smoking in public places.
Mills called the proposed guidelines "a big deal" and a watershed moment in the wellness movement.
"When you break it down and look at the statistics of the many chronic diseases and risk factors America is facing, we really do need to shift the focus to prevention and awareness," she says. "It's a new role for providers as we take off our acute care hats and ask, 'How do we get ahead of this curve?' It is important when we look at the health of this country with the aging population and limited resources across the board to ask how do we implement new and innovative care programs to stop this progression of chronic diseases? It's getting back to the basics of good primary care, working on prevention and lifestyle and changing behaviors."
Reed is less sanguine. "My personal opinion is it will have no real influence. The only thing it will do is add clarity and guardrails."
Standalone cancer centers may be particularly vulnerable to shifting market pressures and healthcare reforms, and if they hope to survive they must demonstrate value and align themselves with the right partners, a new report says.
"It's the basic blocking and tackling response. How do you deliver greater value of quality and cost, and what is the strategic response, what is the right alignment to preserve long-term viability?" says Andy Ziskind, MD, a cardiologist and author of the brief Can Standalone Cancer Centers Survive?, published by Huron Consulting Group.
Ziskind believes that standalone cancer centers will have a harder time finding patients with the advent of integrated care.
"As health systems are integrating themselves more to create truly integrated delivery systems and they are hiring oncologists, they are trying more and more to keep their patients in the system," he says. "There is more resistance to cancer patients traveling to freestanding cancer centers. Also, a less but still relevant piece is the insurance models of narrow networks are growing. Narrow networks are here to stay, and that may limit access for some patients from an insurance perspective to go out of network."
The competition for patients will increase in an environment of continued downward pressure from government and private payers. And even as those reimbursements decline, cancer centers and other healthcare providers will see costs continue to rise. "So, there is a need to be more efficient operationally. That is in terms of basic nuts and bolts and in terms of reassessing how to create better clinical care processes," Ziskind says.
While the need to improve value and efficiency isn't limited to standalone cancer centers, Ziskind says the centers are particularly vulnerable because of their size. "In theory, if there were a large orthopedic or cardiovascular hospital, the same dynamics would apply," he says. "But for the most part, the imaging centers, the behavioral health centers, even the orthopedic ambulatory centers, tend to be smaller and more responsive to local market dynamics, whereas a cancer center might get referrals from a multistate region."
Over the next five years, Ziskind says he anticipates that standalone cancer centers will follow the rest of the healthcare sector and consolidate. In the meantime, he says, cancer centers have to return to the basics around clinical and financial alignments.
"The first thing is there has to be a rigorous, disciplined focus on becoming cost-effective and generating value in the sense of quality over cost—true clinical value and cost-effectiveness. That has to be embedded into the way they do their work," he says. "The other is reevaluating their affiliations and alignment models. That may mean affiliations or mergers or acquisitions. But the cancer center needs to be assured that there is a primary and a specialty referral source that is durable."
While healthcare reform and market pressures will create challenges, Ziskind says they will also produce opportunities for high performers, particularly specialists.
"Under healthcare reform and payment reform and accountable care, the ideal is that the patient should go to the right place at the right time for the right treatment by the right people," he says. "That will tend to favor the highly specialized treatments, like bone marrow transplants or stem cell transplants or potentially proton therapy. What it will discourage is routine cancer care being delivered at the freestanding cancer center—things that can be done locally."
