The public should be excused if, drawn into the endless news coverage of last week's U.S. Supreme Court arguments on the constitutionality of the individual mandate, they mistakenly think that healthcare reform centers around legal issues.
And the fierce debate on the presidential campaign trail over the merits and faults of the Affordable Care Act, and the often superficial media reporting on that debate, could also lead the public to mistakenly view healthcare reform as primarily a political issue that hinges upon who wins in November.
However, neither politics nor constitutional challenges are driving healthcare reform. In fact, delivering better healthcare, while certainly desirable , isn't even the main driver of healthcare reform.
What's driving healthcare reform? Follow the money. It's all about what we can and—increasingly what we can no longer—afford.
Regardless of how the Supreme Court rules, or who wins the White House this fall, or which party controls Congress in 2013, or whether it's "ObamaCare" or some improbable Medicare voucher scheme, or some form of muddled political inertia, the economic pressures forcing the issue now will still be there in the coming months and years.
The stats on healthcare costs are familiar. The rate of growth in healthcare spending in this country is unsustainable. According to the Kaiser Family Foundation, healthcare costs grew from $256 billion in 1980 to $2.6 trillion in 2010, and healthcare spending now consumes about 18% of the nation's gross domestic product. Although healthcare spending growth has slowed of late, thanks largely to reduced utilization during the economic downturn, that growth still easily outstrips general inflation.
For three decades we have been living in an era where healthcare "cost containment" has been a euphemism for passing the buck to healthcare consumers. Kaiser Family Foundation reports that since 2001, employer-sponsored health insurance premiums have grown 113%.
It's not hard to see why wage growth is stagnant. Payers are stressed and tired by this arrangement, and they are demanding reforms. That's not going to change if the Affordable Care Act is overturned.
Rather than hypothesize about what may change if the individual mandate is struck down, or if a Republican or a Democrat is in the White House, we should focus instead on the constants of healthcare that will still be in place in the coming years regardless of what happens between now and November.
"The constant is going to be the focus on the federal budget deficit and the continued increase in healthcare costs," says Dean Diaz, vice president and senior credit officer at Moody's Investors Service. "Regardless of what happens in the Supreme Court now there will be continued debate on how to rein in the growth in healthcare costs."
In other words, don't expect your Medicare reimbursements to keep pace.
Diaz says the strategies in place now in the for-profit hospital sector won't change much regardless of what happens in legal or political arenas. "There may be some tweaking of strategies here and there. But the focus on trying to operate more efficiently, having strong market position, those strategies will play either way," Diaz says.
"It will still be important to have a strong market position because you want to be in a position of strength in negotiations with commercial insurers," he says. "So at a local basis, market position is still going to be very important, and maybe even more important given the continued pressure on the growth in the commercial reimbursement."
Diaz says providers understand that they're going to be asked to do more and for less money. "Any efforts to continue to trim costs and operate more efficiently but still effectively clinically are going to remain a focus again no matter what happens in Washington. Especially on the government payers, the focus on the deficit and the spending levels for healthcare are absolutely going to pressure reimbursement from government payers," he says.
"It's already resulted in slower growth in recent periods and it's only going to become a bigger discussion as some of these proposals to trim the deficit come back to life."
Patricia Webb, senior vice president and CHRO at Catholic Health Initiatives, says the Denver-based health system remains focused on the use of primary care physicians and allied care professionals, such as nurse practitioners to improve population health and promote wellness.
"At the rate healthcare costs are growing we had to modify how we take care of patients and focus more on population health and preventive care that is going to happen and that is what needs to happen from our perspective," Webb says.
"It is driven more by the economics of it and if for some reason the Affordable Care Act is not passed and whatever happens the population is still going to need to access healthcare and we have to be in a position to provide it. The best way to do that is to do it in a way that provides the quality that needs to be provided, with appropriate access in a cost effective way," she says.
Webb says CHI isn't "putting anything on hold" as the system and its 70,000 employees look to the future.
"We know that even today and projected into the near future we are going to have continued shortages with primary care physicians, nurses, and other allied health professions," she says. "We are not going to stop recruiting those professionals or looking forward to address those issues. That's the direction we're moving in, and I think that is true for healthcare in general. If we stay focused, I think we'll be fine."
An 'unconscious' racial bias by some physicians could harm relations with African-American patients and ultimately may impair health outcomes.
A study in the American Journal of Public Health found that primary care physicians who held these unconscious racial biases spent more time with African-American patients during routine office visits, but also spoke slowly and dominated the conversations.
As a result, African-American patients queried by the researchers said they felt less respected, less trustful, and less engaged in the decisions related to their health.
"It could negatively affect the patient because although the visits tended to be longer and the doctors were talking slower the patients reported feeling less involved in the decisions," says Lisa A. Cooper, MD, a professor in the Division of General Internal Medicine at the Johns Hopkins University School of Medicine, and lead author of the study.
"What we know from other studies looking at those kinds of indicators is that when patients don't feel as involved in decisions about their care they are not as likely to follow through on what is recommended to them, or come back for follow up visits."
Cooper and other researchers examined audio recordings of office visits among 40 primary care physicians and 269 patients in Baltimore-area medical practices. The recordings were from earlier studies examining care regimens for patients with chronic diseases such as hypertension and depression. The patients were mostly middle-aged women, and 80% were African-Americans. Of the physicians, 48% were white, 30% were Asian, and 22% were African-American. Two-thirds of the physicians were women.
The researchers used the standard Implicit Association Test to assess the physicians' unconscious racial attitudes. The physician took two versions of the IAT—one related to race bias and one that assessed whether the physicians thought patients of different races were compliant with medical advice.
"I don't know if these physicians were aware that they were acting this way because of the unconscious stereotype," Cooper says. "I don't think we were quite prepared for the finding that when physicians would have that unconscious stereotype, it almost seem like they were trying to compensate by talking more slowly and lecturing the patients. That was surprising."
Cooper says there is a lack of awareness in the general public as well as among physicians about this unconscious bias. "A lot of people feel on a conscious level they have very positive attitudes about people of different racial and ethnic backgrounds. So they don't feel on a conscious level that there is a problem," she says. "But we are socialized in such a way that these unconscious biases are there from an early point in our lives. We don't realize that we are behaving in a certain way."
To make her point, Cooper, who is African-American, says she took the IAT and it showed that she had a slight bias against African-American patients.
"I grew up in Africa and spent time in Europe before I came to the United States. I thought of myself as so multicultural. I have lived with so many different people. Surely I wouldn't have any unconscious biases," she says. "I found out of my test I had a slight preference for whites over blacks."
Cooper says she was surprised at the extent to which the patients sensed the bias in the study. "When there was more bias, particular the African-African patients talked of feeling less respected, not as well liked and felt like they didn't trust the doctor as much. Even though this was not overt, there was something patients could pick up on."
Cooper recommends that physicians take the IAT to learn if they may be harboring unconscious biases. The test is free and confidential and can be done online. If the test determines that a bias exists, Cooper says that does not make the physician a racist or a bad person, only human.
"Our experience has been that when physicians are made aware that something they are doing is not resulting in a good impression with a patient they are more than willing to try something different," she says.
"You don't say 'I can't appear racist' because when you do that you raise the patient's anxiety level so they behave more poorly," she says. "We focus on the positive. 'What is the best way I can behave in this interaction to make sure this person knows I value his opinion?'"
To confront her own biases, Cooper says she does a quick self-assessment before meeting with patients.
"I question myself before I move forward in my interaction," she says. "What assumptions am I making about this person where I could be wrong? Just doing that is an excellent first step. Have people make sure they stop and question their assumptions and ask themselves 'Am I behaving any differently than I would if this person appeared to be different?'"
A California appeals court this month ruled that certified registered nurse anesthetists in that state do not need physician supervision to do their jobs.
It's a clear victory for rural hospitals in California that have complained that requiring physician supervision of CRNAs adds unneeded costs and limits the range of surgery services they can provide.
The March 15 decision by the First District Court of Appeal in San Francisco really isn't a surprise. California is already one of 16 states that have opted out of a federal mandate that denies Medicare reimbursements to hospitals that allow CRNAs to work without physician supervision. Republican Gov. Arnold Schwarzenegger opted out in 2009, and his Democratic successor Jerry Brown supported the decision.
The suit was brought by the California Medical Association and the California Society of Anesthesiologists and it's not clear if they plan an appeal. CMA on its website says it is "disappointed with the decision" and is "exploring all legal, regulatory and legislative options."
Not surprisingly, California Hospital Association spokeswoman Jan Emerson-Shea told HealthLeaders Mediathat CHA was "very pleased by the decision."
There has been a lot of back-and-forth arguing between CRNAs, anesthesiologists, and CHA about whether or not patient safety is compromised when states opt out of the supervision requirement. Obviously, in a perfect world, it's always preferable to have the highest-trained medical professionals administering or supervising care.
It's not clear, however, if any studies show that patient care suffers when CRNAs provide unsupervised care.
Besides, this case isn't about patient safety, or even access to care. It's about money.
The savings in compensation costs and the money generated by additional procedures could be considerable for rural hospitals. Merritt Hawkins & Associates, the Dallas, TX-based national physician recruiting firm, says that first-year financial packages for anesthesiologists range from $275,000 to $350,000, while CRNAs earn around $200,000.
"Obviously the return on investment is there. It's a simpler search. There are more CRNAs in the marketplace than there are anesthesiologists," says Sam A. Karam, division vice president for Merritt Hawkins. "From a sheer dollars-and-cents standpoint it always makes sense to have CRNAs. Now, that is the main reason we have seen CRNAs being more in demand."
Karam says anesthesiologists were once among the most-highly sought after medical specialists. That is no longer the case.
"From a demand perspective, is it difficult to find anesthesiologists today? No. That's a stark change from just a few years ago when the demand for them was extremely high," he says. "You will find some that actually aren't even working in permanent positions. They're working locum jobs to stay afloat."
CRNAs are not the main reason for the slowing demand for anesthesiologists. Larger factors, including the long-sputtering economy and the anticipated changes that will come with healthcare reform, have "flip-flopped" market demand away from specialists and towards primary care docs.
Demand for anesthesiologists has dropped, Karam says, because demand for elective procedures has dropped. "That obviously was a great deal of the profit margin that a lot of surgeons were seeing when they opened their own surgery centers. With that market dipping, it took away a lot of the profit margin and a lot of the demand," he says.
"In addition you have hospitals being far more aggressive in communities than they have been before. The consolidation of medicine has really pushed hospitals to go out in their communities, buy up these surgery centers, or at least partner with these organizations and be a stronger player in their own backyard, so that they aren't losing those profitable procedures when they are there," he says.
Of course, many of the same economic forces that are hurting anesthesiologists are also hurting CRNAs, but Karam says CRNAs are having a "far easier" time finding work, and it all boils down to labor costs.
"They are still even higher in the locums demand market than anesthesiologists. They are in a much more comfortable position simply because what they can do, what the law allows them to do, and what they are commanding for pay," Karam says.
Perhaps the best hope for anesthesiologists is if CRNAs get too greedy.
"Paying CRNAs will change once they start to lobby and demand higher salaries," Karam says. "Once it gets up there to $250,000 or what an anesthesiologist can make, then obviously hospitals or medical groups will be more comfortable paying that money to a physician rather than an allied professional."
As for the California ruling, it's hard to see how this could end up differently. Many rural hospitals are running on razor thin margins. Medicare and Medicaid are trimming reimbursements, and private plans have adopted zero tolerance toward cost shifting. The hunt for savings is prompting hospital administrations to reexamine every aspect of care delivery, as they should.
Again, if there is no conclusive evidence to show that patients receive substandard care or are placed at greater risk under CRNAs, rural hospitals that provide bread-and-butter surgical procedures should not have to pay considerably more for the services of an anesthesiologist.
Anesthesiologists commanded top compensation during a robust economy. Like many other professionals, however, they may have to readjust their expectations. Perhaps it is time for them to make compensation demands that are more compatible with the market.
Cleveland Clinic this week is using the city's professional football stadium to field a three-day recruiting blitz to hire 600 new registered nurses.
The Stanley Shalom Zielony Institute for Nursing Excellence organized the job fair both to fill vacant posts and to proactively prepare for anticipated new demands that will come with healthcare reforms.
Cleveland Clinic CNO Sarah Sinclair says it's the first time the prestigious health system has attempted a recruiting drive this big.
"Part of this is to put the brand of our nursing institute out there in the community so that people get an opportunity to see many of the great things we are doing," Sinclair said in an interview. "We are putting the face of nursing to the community. It also gives all of these folks an opportunity to see our various hospitals and what each of the hospitals has to offer."
"The other thing we've been able to do is through some of our national benchmarking, to really get our arms around what the demand side is for our business," she says. "We have the process well orchestrated and nothing will be done any differently than it is in the normal recruitment process."
The job fair runs March 28-30 at Cleveland Browns Stadium. Demand should not be a problem. Sinclair says more than 1,180 nurses have preregistered for the event and she is anticipating many more nurses will visit the event as "walk-ins."
"Those are folks who are either new graduates, experienced nurses, nurse leaders, or nurses who will be graduating in the near future," Sinclair says.
Cleveland Clinics employs more than 11,000 nurses system-wide. Of the 600 new hires, 400 will be for existing positions, and 200 will be for new positions. All of the jobs are in the Northeast Ohio Region of the Cleveland Clinic Health System.
"We ask each of them to spend four hours with us," Sinclair says. "We will go through all the normal steps they would go through in the recruitment process which includes the obvious things, lab work, the physical exam, background checks, and of course go through an interview with the areas of choice they want to apply for. We do have a physical capacity assessment to make sure that our nurses are able to do the jobs we are asking them to do."
Sinclair says the biggest demand for nurses at the Clinic right now is in medical surgery, advanced practice nursing, imaging, intensive care, and nurse leadership, but that the changing landscape of healthcare means that other specialty areas may soon be in demand.
Successful candidates will be offered a job contingent upon their passing the physical and background checks. Smokers need not apply. Cleveland Clinic announced in 2007 that it would no longer hire tobacco users.
Sinclair says she'll consider the job fair a success if she can "fill every position I have open and have them started within a 60-day period and then retain them by the end of the year."
The last five years have seen a great expansion in the workforce and the acute nursing shortage is over, for now, according to a study published in the New England Journal of Medicine this month.
But the need for nurses is expected to surge again as the economy improves, older nurses retire, and more people seek healthcare as a result of healthcare reform.
An insurance industry study, touted as the largest of its kind, shows that medical costs can be reduced by more than $1,800 a year for each diabetic patient who receives periodontal care.
The study examined medical records from more than 1.6 million people who were covered by both United Concordia Dental and Highmark Inc. and identified about 90,000 Type 2 diabetics. About 25% of those diabetics elected to receive periodontal treatment in 2007 and the study compared their medical costs over the next three years with the 75% of diabetics in the group who declined the oral care.
"The data is striking. In 2007 you had fewer than half the inpatient admissions if the patients had periodontal surgery when compared with the patients who did not," says Marjorie Jeffcoat, DMD, with the University of Pennsylvania, the lead author of the study.
"I also found it striking that this result was carried through for three years," Jeffcoat told reporters at a Monday teleconference. "If you look at the mean number of visits they paid to a physician, again in 2007 they saw half the number of physician visits and this statistically significant result was carried through again for three years."
"If we look at mean medical costs we have a reduction in all three years and if you look at it the mean medical savings was $1,814 per patient per year. That is a striking number. This affect is apparent two years after the periodontal treatment," Jeffcoat says.
The study's release coincided with United Concordia launch of a diabetes-specific program that provides 100% coverage for surgical procedures, other treatments, and maintenance for patients with gum disease.
"This is the most statistically conclusive study proving the relationship between oral health and medical cost savings. The savings are just the start of what is to come," United Concordia COO/President F.G. "Chip" Merkel told reporters. "We believe that employers will realize reduced medical costs when their employees with diabetes receive appropriate periodontal care."
James Bramson, DDS, chief dental officer for United Concordia, noted that about 25.8 million Americans have diabetes, a number that has doubled since 1999. He says the sheer size and scope of Jeffcoat's study shows "that the results here are not a fluke."
"We did some modeling to look at the ability to take care of these kinds of patients and the cost of doing that and what kinds of savings you'd have on the medical side," Bramson says. "In a group of about 200 members, even as small as that, it would only take about 3% of the diabetics to actually return the savings on the medical side equal to what it would cost to provide these additional treatments. Beyond that all the rest is healthcare savings."
While the study examined diabetics, Bramson says other studies have provided linkage between oral health and coronary artery disease, cerebral vascular disease, and even premature and low-weight infants. "We believe other chronic diseases will show some association, some economic savings medically if those people had periodontal treatment," he says. "So when we know more about the breadth and depth of the accuracy of that savings across those other diseases our hope here is to broaden the coverage we are now starting with diabetes."
"The thought is you don't need to cover everybody in the population," he says. "The better thing to do is cover those targeted populations where we can show savings and where we know an intervention program of information and assistance will help them get in and get the treatment they need."
Bramson says dentistry accounts for about 4% healthcare spending in the United States, while hospital care, physician and clinical services, and drugs account for 63% of all spending. "If we can improve the spending in the dental that is going to affect the three other largest segments of the healthcare spending, so we believe you will have some savings well beyond the $1,814," he says.
The study did not specifically examine the cause-and-effect relationship between periodontal disease and diabetes, but Jeffcoat says earlier studies have explained the linkage.
"Any sort of infection you have, be it pneumonia, a kidney infection, it makes your diabetes worse," she says. "Periodontal disease is an infection. If we can get that infection under control we tend to get the hemoglobin A1C, the measure of three months of diabetes, under control. It has to do with inflammation and infection and getting it under control."
For years now employers have incrementally imposed themselves into the private lives and behaviors of employees.
The motives are largely around money. Labor is the single largest expense for many industries. It costs a lot of money to recruit, hire, train, insure, and replace a worker. And increasingly, the beyond-the-walls personal conduct of workers, such as posting patient pictures and information on social media sites, is becoming more of an issue because employers can be held liable.
It's been a gray area. For example, a growing number of companies, including healthcare organizations, refuse to hire people who use tobacco, a legal product. This has been justified in the name of productivity, health insurance costs, and patient safety. Job candidates are tested for traces of nicotine in their urine to prove their innocence.
When do the legitimate concerns of employers verifying the claims of job applicants and employees crash against the privacy wall of those same people?
That question was answered recently when the Associated Press reported that job applicants at some companies were being asked by potential employers to provide passwords to their accounts on Twitter, Facebook, and other social media. For anyone looking for a bright line of demarcation in the privacy rights debate, this is it.
"It's a gross intrusion upon the privacy rights of job applicants and employees," says Paul Stephens, director of policy and advocacy with San Diego, CA-based Privacy Rights Clearinghouse.
"People using social networking sites have become accustomed to the concept of granularity, that is the idea that they can choose who will see the information they can post. That is why there are public and private portions of profiles and the ability to restrict which friends see which portions of various posting. Individuals have come to have that expectation that they can control what they post. What you are seeing here is a runaround that defeats the whole purpose of the granularity that social networks are providing to their users," he says.
So far, reports have been anecdotal. It's not clear how widespread a problem this has become. Chris Conley, a technology and civil liberties policy attorney with American Civil Liberties Union of Northern California, says action needs to be taken to ensure the practice does not become more prevalent.
"Let's hope this does not become a trend and we in the ACLU will be working with various alternatives to make sure that people don't have to reveal their private lives as a condition of being even considered for a job," he says. "We don't think information should be any more or less private simply because it is placed online. Letters you have in a shoe box at home or the emails on your laptop have an expectation of privacy and legal protection. No one would dream of having access to those. It should be the same for Facebook."
There is much that is wrong with demanding access to social media accounts.
For starters, what are employers looking for? What constitutes "objectionable behavior" on a Facebook page that would nix a job applicant's prospects? Would it be evidence of illegal drug use, criminal conduct or other egregious failings? Or would it be evidence of sexual orientation, age, or religious or political affiliations? Who defines what is objectionable?
And it is hard to imagine that such an invasion of personal rights would be universally applied to all job applicants or employees. Is the CEO candidate being asked to hand over the keys to her Facebook account, or is it just the folks applying for a job on the custodial staff?
"It's an unfortunate side effect of the fact that the job market is so tight right now, that individuals in many situations are willing to surrender their privacy and other rights in an attempt to secure employment," Stephens says.
Such violations might be tolerated in the short term when jobs are scarce, but those employees will justifiably bolt at the first opportunity. It would not be surprising to learn that companies that engage in this behavior also suffer high turnover and lack of employee engagement, and fail to see the linkage.
Finally, it's really not very effective. There is nothing to stop a job applicant from erasing from their social media accounts everything that might be deemed offensive or controversial. "That doesn't make the practice any less harmful," Stephens says. "Essentially, what is the employer gaining if the employee prior to providing the information can essentially sterilize or bleach their profile?"
So far there are no reports that healthcare organizations are engaging in this conduct. However, healthcare employs more than 14 million people and there are unquestionably huge consequences for providers who hire the wrong people. In this era of draconian HIPAA penalties, healthcare organizations are understandably sensitive to the implications of social media.
For anyone thinking about asking that job applicant across the desk for their Facebook password, don't do it.
The nominal information about that person you may glean from a social media site is of no value when it's compared with the damage inflicted on that essentially powerless person's sense of dignity. And even if they're "lucky" enough to get hired, it will be impossible to ask for their loyalty and trust after you've failed to extend it to them.
Even as the U.S. Supreme Court prepares to debate the constitutionality of the individual mandate, and Republican presidential hopefuls vow to scrap "ObamaCare" if they win in November, nearly every state is quietly implementing the provisions of the Affordable Care Act, a review shows.
The study by The Commonwealth Fund found that as the second anniversary of the Affordable Care Act nears, 49 states and the District of Columbia have already acted to support implementation.
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"I do see states moving assertively forward on implementing the provisions that went into effect in 2010," Sara Collins, vice president for Affordable Health Insurance at The Commonwealth Fund, tells HealthLeaders Media.
The report reviews state action on 10 early reforms, including the Patients' Bill of Rights that went into effect in September 2010. Between Jan. 1, 2010, and Jan. 1, 2012, 23 states and the District of Columbia had taken new legislative or regulatory action on at least one of these reforms, and an additional 26 states had taken other action to promote compliance with the reforms, such as issuing bulletins to insurers, The Conference Board said.
The reforms include:
expanding dependent coverage for young adults up to age 26,
prohibiting lifetime limits on health benefits,
phasing out annual dollar limits on health benefits,
prohibiting preexisting condition exclusions for children under age 19,
prohibiting rescissions (cancelling insurance, except in cases of fraud or intentional misrepresentation),
covering preventive services without cost-sharing,
expanding coverage of emergency services,
allowing choice of primary care provider,
allowing choice of pediatrician, and
allowing access to obstetricians and gynecologists without a referral
"Most states have either passed laws, issued regulations, or have taken other measures such as sub-regulatory guidance or exercising policy review to make sure the residents in their states are protected by these new provisions in the law," Collins says. "The fact that 49 states have moved forward to fulfill their role in the implementation of these reforms is pretty significant."
The lone exception is Arizona. "They officially told the researchers in the study that they are not moving forward to enforce the regulations," Collins says. "There is a nuance about some of the stuff the Arizona insurance department itself is taking care of, but the state itself is not moving forward."
"But let's be clear: People are protected by the provisions of the law whether or not their state moves forward with the provisions of the law. If Arizona says it can't pass legislation to implement the rule then obviously the federal government will need to enforce it."
Otherwise, Collins says, there does not appear to be much of a Red State/Blue State divide when it comes to implementing the ACA. "If you look at states that passed laws to give themselves the legislative authority to implement all 10 of these provisions, it's a mix: Connecticut, North Carolina, Maryland, Hawaii, Iowa, New York, Virginia, Vermont, Maine, Nebraska, North Dakota, and South Dakota," Collins says.
The Affordable Care Act was signed into law on March 23, 2010 by President Obama, with early market reforms taking effect six months later. The report found that the speed at which many states adopted the new provisions of the ACA probably was more dependent upon the schedules of state legislatures. The report also suggested that some states remain cautious about further ACA implementations until the U.S. Supreme Court rules on the constitutionality of the individual mandate. That ruling is expected in June.
The report warns that even though states have until 2014 to fully implement the ACA, some reforms could prove to be more difficult because they are new and don't exist in state law.
"When you look down the road to the 2014 reforms—the bans on underwriting, the guaranteed issue provisions, the new federal subsidies that will be flowing into states along with the Medicaid expansion—these are important changes that states are going to be experiencing in their markets, and also just in terms of their overall fiscal health," Collins says. "These are long-term chronic issues that we have experienced for many years and these provisions really do address some of the serious issue that states have faced."
The federal government's decision to withhold about $600 million in funding for primary care community health centers will have a disproportionately hard effect on rural Americans.
More than 90% of the 20 million people who are served by health centers have incomes that are below twice the federal poverty level. And about 48% the of the nation's 8,100 federally funded community health centers serve rural communities. People in rural areas tend to be older, poorer, and sicker than their urban counterparts. They also tend to have fewer healthcare options and more difficulty accessing healthcare than people in urban areas.
About one-in-seven rural Americans gets their care from a community health center.
With that in mind, it's troubling to see the ambitious plan to double services and access from 20 million people to 40 million through community health centers waylaid by the budget battle, even though the need is growing.
Last year, for example, communities across the nation submitted 1,900 health center grant applications for new sites or services to the Health Resources and Services Administration, which oversees the program, but only 67 applications were approved because of funding shortages.
This seems remarkably short-sighted when almost everyone, regardless of their political leanings, understands that access to primary care, preventive medicine, and disease management are cost-effective alternatives to acute episodes that require hospitalization.
A report from the National Association of Community Health Centers notes that a lack of access to primary care services and other barriers to healthcare lead invariably to poor health outcomes. That, of course, creates higher healthcare costs as uninsured or underinsured patients—or insured patients with few primary care options—go to the emergency room for non-emergency care.
Dan Hawkins, senior vice president for policy and research at NACHC, says the grant money, which can be as much as $650,000 per site, typically accounts for about 20% of the operating budget for most community health centers.
"It is the foundational support. It is what allows them to go out and hire staff and secure a facility to begin providing services," Hawkins tells HealthLeaders Media.
"Every payer reimburses after the fact. The rest of it comes from Medicare/Medicaid, private insurance. About one in six health center patients has private insurance, some state and local support, philanthropic support, and even money from the patients themselves. But the health centers can't get any of that until they're able to get the ball rolling. That is what the grant does. It gives them the ability to get off the ground and get going," he says.
Hawkins says that community and rural hospital leaders "should be working overtime to help make these health centers operational."
He says rural hospitals and other providers should view community health centers not as competitors, but as partners in delivering care. Frequently, hospitals can provide transportation to care, or make home healthcare visits to better monitor patients, or translator services.
"Health centers don't exist to compete with hospitals. They exist to cooperate and partner with hospitals," he says.
For example, health center clinicians are required to follow their patients into the hospital as part of the continuum of care. "That means for a rural hospital [that] additional clinical staff will be adjunct, but with admitting privileges," he says.
While 40% of health center patients are uninsured, the remaining 60% of patients do have some form of coverage, "so for the bulk of patients who rural health centers serve there is a payer source for those patients if they need to be admitted or they need an MRI," he says.
"Secondly, because the health centers are there and generate business for hospitals, they have literally helped to keep hospitals open and they've done the same for nursing homes," he says. "They are often adjunct staff for rural nursing homes who will visit patients in the hospital to provide care and they help to keep things functioning."
"Thirdly, health centers have formed partnerships to secure other kinds of funding for home health agencies and visiting nurses and other kinds of partnerships with hospitals," he says. "So whether it's from a business perspective, from a let's-keep-the-doors-open perspective, or a partnership perspective there are many reasons why rural hospitals should support the opening or rural health centers."
The NACHC report notes that rural counties with community health centers had 25% fewer uninsured in the emergency room for ambulatory care sensitive conditions, compared with counties without a health center.
"Most importantly even if that rural hospital has an emergency room, who wants to see it crowded with people who don't need to be there but they don't have anywhere else to go?" Hawkins says.
The study also found that community health centers generate about $5 billion annually to rural communities through employment and supplier purchases.
It is hard to say if Congress or the White House would respond to a concerted effort by rural healthcare providers to call for the reinstatement of funding levels for community health centers.
But it's not a hard argument to make or to grasp. Rural healthcare providers should make the case for community health centers even if our elected representatives seem immunized against calls for logic and common sense.
It appears that reforms under the Patient Protection and Affordable Care Act are doing little to appease employers' longstanding concerns about the rising cost of providing health insurance to workers.
That might not necessarily be a bad thing, however, if that anxiety creates cost-effective new benefit options that target what employees say they value.
For the fourth year in a row, the cost of employer-sponsored healthcare topped the list of concerns in the 18th annual Top Five Total Rewards Priorities Survey, published by the International Society of Certified Benefits Specialists and Deloitte Consulting LLP.
David Lusk, a principal at Deloitte and author of the report, says there is too much uncertainty around the PPACA to offer much comfort for employers right now.
"The first [uncertainty] being the Supreme Court reviewing the individual mandate," Lusk says. The court has set aside three days next week for the review, with a decision expected in June. "There are studies that have been done that say without the individual mandate, the concept doesn't hold together. We are going to spend more time hearing and arguing about this topic than any topic in decades. That gives you a sense of the importance of it."
Lusk says that 48% of the 330 respondents to the online survey said they were taking a "wait and see" approach, and apparently had no plans make changes in their coverage.
Of the companies planning changes, 17% said they might drop employer-sponsored coverage for full-time employees and pay the penalties, 37% plan to maintain their grandfathered health plans as long as possible, and 23% are considering reducing the hours for part-time employees below the threshold to avoid mandatory health coverage.
The survey also found that:
85% of respondents believe their benefits costs per employee will increase over the next five years because of the PPACA.
68% of employers plan to reevaluate their benefits strategy because of the PPACA.
70% are considering expanding wellness programs to help manage healthcare costs.
With so much uncertainty and potential cost at play, Lusk says companies might reexamine their traditional role in providing healthcare coverage. However, dropping healthcare benefits and sending employees out to find their own care on government-sponsored health exchanges presents its own sets of risks and reward, and depends heavily on the type of business. "Companies would make decisions around how transferable the skills are and how easily somebody is replaced," Lusk says.
Some employers would feel that dropping healthcare coverage would put them at a significant disadvantage with competitors for recruiting talent. However, Lusk says money saved from cutting healthcare coverage could be used to provide other incentives that employees might actually prefer.
"Let's say a company pays $8,000 a head today, and the penalty to drop insurance is $2,000 or $3,000 or a substantial difference. They take the number of employees times that difference, and they generate a pool of money. With that money they say, 'We want to bolster our 401(k) match, or a profit-sharing plan, or start a variable pay plan where everyone benefits from the company's success,'" he explains.
"This could create some tremendous flexibility for creative organizations to relook at all their rewards, understand there may be a new alternative for healthcare, and decide if for them they have to sponsor healthcare," Lusk says. "If there is money saved from that, they need to show how it can be redistributed in a new way."
The problem for many companies, Lusk says, is an inability to think "holistically" when it comes to redesigning benefits structures. Employer-based programs like workers compensation, health insurance, and retirement plans tend to be looked at in isolation.
"Companies could benefit from looking at [these programs] holistically and looking at them concurrently and saying, 'Do our employees value these programs?' If there is an area that isn't that important but there is a lot of money, maybe that is the place to cut back and redistribute. It doesn't have to be about cutting costs. They can think about redistribution."
Many companies would be loath to stray from the norm and offer pay and benefits that aren't comparable with competitors. But Lusk points out that "the reasons why individuals are attracted to or stay with companies are not those transactional benefits around comp and benefits, but those relational rewards around environment, understanding the organizational strategy, communication from leadership, and learning and development." Benefits are not the main drivers in employment decisions—at least, not yet.
Expect the wave of hospital mergers and acquisitions to grow, says the author of a new report from Moody's Investor Service.
The only thing that might slow the accelerating pace of M&As of not-for-profit hospitals and health systems would be if the U.S. Supreme Court overturns the individual mandate in the Affordable Care Act.
And even if the mandate is scuttled, Lisa Goldstein, associate managing director at Moody's, says that will create only a temporary "stumbling block" in the consolidations, because other financial pressures will remain in play regardless of the high court's ruling.
"If the Supreme Court rules that the individual mandate is indeed unconstitutional, then some hospitals or health systems may take a pause and ask, 'Do we need to grow? Do we need to join a system?'" Goldstein tells HealthLeaders Media. "But we believe that would be a brief pause because the main driver of the consolidation wave is overall payment reform, revenue reductions, and reimbursement pressures. Whether or not the mandate stands, the reimbursement pressure is going to continue."
Goldstein, the author of a new Moody's report—New Forces Driving Rise in Not-for-Profit Hospital Consolidation—says many of the market forces that were in play in the not-for-profit consolidation boom of 12 years ago are still in play now. Those forces include improving market share to better leverage payers, risk sharing, economy of scale, access to capital and technology, expansion of service lines, and improved recruiting.
However, Goldstein says, unlike 12 years ago the current push is fueled by new variables that include the stagnant economy, spiraling healthcare costs, and unfunded pensions. What's more, this latest wave of consolidations is being initiated by a new group of investors that mostly weren't in the picture a dozen years ago, including insurance companies, for-profit hospital companies, and private equity firms.
"This country was founded on not-for-profit healthcare. Historically hospitals have been roughly 85% not-for-profit or government owned, and 15% for-profit," Goldstein says. "It is not balanced at all, but we may see some movement in those numbers. The for-profits are aggressive. Their strategies are all about growth and returning shareholder value, and you do that through growth."
After bunkering for years in a stagnant economy, Goldstein says for-profit entities are looking for investments. "They have resources," she says. "Many of the for-profits held their cash on the sidelines during the recession and the credit crisis, and now they are ready to put it to work. We could see some increased for-profit activity."
Goldstein says private equity firms such as Cerberus Capital Management have acquired hospitals because they see the successes of for-profit systems such as HCA, Vanguard Health Systems, and Tenet Healthcare Corp. "They see the margins the for-profits produce, which are very strong, and they say, 'We need to put our money to work. If these guys are getting a good return, we're going to do it too,'" she says. "Typically, the for-profits run very lean operations."
Goldstein says these for-profit players do not appear to be overly concerned with expected thinning reimbursements from government and private payers, in part because the for-profits can better control their patient mix.
"As a for-profit, they don't necessarily need to treat all comers unless it's through the emergency room," she says. "So they may be more selective about taking the private-pay commercially insured folks, and maybe less the Medicaid and Medicare folks. So their payer mixes differ widely from the not-for-profits. Whether or not a hospital is better managed by a for-profit or a not-for-profit, we cannot say. It's a different mission and different strategies."
Another factor fueling the consolidations is the expected diminishing reimbursement from private payers. A dozen years ago, providers could cost-shift low Medicare and Medicaid reimbursements to the private plans. Not anymore.
Rather than relying on pure market share, she says, providers will increasingly have to demonstrate to private payers and government programs that they can provide high-quality care at a lower cost. The move toward outcomes and evidence-based medicine has also been a key driver in physician alignment and employment models for many health systems.
"Size and scale remain important drivers to today's consolidation strategies, but the opportunities to gain leverage and higher rates from commercial payers are quickly dissipating," she says. "Size and scale are now an important means to gaining greater efficiencies and driving waste and costs out of the delivery system."
With the continued consolidation, hospitals that are left behind to stand alone will face significant challenges, Goldstein says. "Hospitals close every year, and we would expect closures to continue," she says. "Our thinking is that there will still be independent hospitals, but the smaller of those hospitals may evaluate their service offerings, may downsize their footprints. So instead of operating a 100-bed hospital, maybe they go to, say, 60 beds and more toward ambulatory services. So the service line and the modality, more on the outpatient, may change."
