Temporary emergency room nurses who are unfamiliar with their surroundings may inadvertently be a threat to the patients they serve, according to new research from Johns Hopkins University School of Medicine.
The study found that the temporary help was twice as likely as permanent staff to be involved in medication errors in the hectic and fast-paced environs of the ER. However, the study's authors stressed that temporary nurses should not necessarily be blamed for those shortcomings, which the researchers said are complex and diffuse.
"A place that uses a lot of temporary staff may have more quality of care issues in general," study leader Julius Cuong Pham, MD, an assistant professor of anesthesiology and critical care medicine and emergency medicine at the Johns Hopkins University School of Medicine, said in a media release. "It may not be the temporary staff that causes those errors but a function of the whole system."
The nation's hospitals have become more reliant on temporary nurses and other temporary clinical staff because of widespread shortages of healthcare professionals. Temporary nurses generally earn higher wages than their permanent coworkers, but they don't receive benefits, and could be cheaper in the long run.
"It's one of those necessary evil sorts of things," Ann Marie Papa, RN, president of the Emergency Nurses Association, tells HealthLeaders Media. "Temporary help can be tremendous when you are struggling with nursing shortages but the key is that these temporary nurses are properly trained and they have proper orientation, mentoring, and supervision."
The Johns Hopkins study examined a national Internet-based voluntary medication error reporting system and data from 2000 and 2005, encompassing nearly 24,000 emergency department medication errors among 592 hospitals.
Medication errors made by temporary workers were more likely to reach the patient, result in at least temporary harm and also be life-threatening, they found. The findings appear in the July/August issue of the Journal for Healthcare Quality.
Pham said temporary personnel are often not familiar with local staff, care management systems, protocols, or procedures. This may hamper communication and teamwork that causes them difficulty in retrieving important medical information and leave them unsure of which procedures to follow.
Temporary help may be less likely to speak up if they see problems and also lag behind the latest knowledge because, unlike permanent employees, temps typically manage their own continuing education.
Papa agreed with that assessment, and said it underscores the need for hospitals to embrace their temporary staff for the time they're there, and give them the same consideration and training they would offer permanent staff.
"It is up to the organization to ensure that the new nurses, the temporary nurses, the new graduates, are properly trained about procedures, protocols, and the culture of the hospital and the department in which they are working," Papa says.
It starts with frontline charge nurses making assessments of the people they supervise to ensure their competency. "Watch them put the IV line in. Watch them interview a patient. Someone has to verify their competency," Papa says.
That alone is not enough, she says. Temporary staff needs to know they have the support of management. "Sometimes temporary nurses tell me 'I go into an organization and nobody talks to me.' There is the reason why the nurses are going to have an error, because they are afraid to ask a question," Papa says. "We have to embrace temporary nurses and help them and be their life line. There should be a charge nurse or a supervisor ready so that if the temporary nurse could say 'I am not familiar with this' or 'I don't know your policy on this,' they are ready to help."
And it's not just the temporary nurses, Papa says.
"You can take a nurse from the same hospital and move [him or her] from the ICU to the post-anesthesia unit and they still need to have a different type of orientation because the equipment and the style of patient is different. It's important that the organizations recognize this. Proper mentoring and supervisions are critical," she said.
The egregious lapses in patient safety and basic hygiene at Parkland Health and Hospital System in Dallas, TX have been the subject of well-deserved and very negative reviews this summer from the state and federal government and from the news media. Just read some of the astonishing deficiencies detailed in the state and federal audits – a combined 600 pages – and it's hard not to get angry, if not horrified.
As HealthLeaders Media'sMargaret Dick Tocknell pointed out last week, the sweeping deficiencies among nine broad categories at Parkland include:
Failure to dispose of soiled gloves and gowns and wash hands after treating patients
Failure to properly dispose of infectious waste, including used syringes, body fluids, used respiratory equipment and used suction equipment
Lack of stabilizing treatment in emergency department before a transfer to another acute care facility
Lack of ER screening by a qualified medical professional
Failure to identify or assess emergency severity index
Medical residents unsupervised during clinical care by either an attending physician or faculty member
ER patients in a high level of pain provided with maps and directed to go to other parts of the hospital for treatment without benefit of any other assistance
Failure to provide 24-hour nursing services
Failure to change bed linens between emergency room patients
Failure to dispose of expired medications
These deficiencies were not incidental mistakes that can not be explained away as regrettable, but understandable oversights at a major safety net hospital which is understaffed, underfunded, and stressed to carry out its mission.
Sadly, the audits paint a picture of a major health system in complete disarray. After reading these findings, it appears that a significant number of staff at Parkland simply have stopped caring. How else can we explain such fundamental flaws?
These aren't just violations of safety standards. These are violations of common sense and compassion. Nothing says "I don't care" like unwashed hands and soiled bed sheets. If Parkland Hospital had been a fast-food restaurant, inspectors would have closed it down and strapped the doors shut with yellow biohazard tape.
It is encouraging that Parkland's executives have accepted responsibility for the shortcomings, and have vowed to revamp hospital operations. It is also sad that it took allegedly at least one patient death, government audits, volumes of negative publicity, and the threat of the loss of about $417 million in Medicare and Medicaid funding before a correction plan was unveiled last week.
The Parkland audit raises larger questions about the quality of care at our nation's safety net hospitals. If it happened in Dallas, what's to say that it isn't happening elsewhere?
The audit adds weight to uncomfortable assertions about the economic tiers in U.S. healthcare delivery, and the perceived lower standard of healthcare for society's most vulnerable – the poor, the uninsured, the indigent. Those stubborn assertions might not be fair, but they are understandable, and they can't be dismissed.
Audits such as these also undermine assertions that "frivolous" medical malpractice lawsuits are driving up healthcare costs. It's a hard sell for hospitals to claim they're the victims of opportunistic trial lawyers when hospital workers aren't doing something as basic as washing their hands. Before asking patients to surrender their right to legal redress, healthcare needs to clean up its act.
A detailed study of the workplace culture at Parkland Hospital should be conducted to determine what led to this breakdown in fundamental operations, chain-of-command, accountability, and employee engagement. It is important that we know why because what happened at Parkland could happen -- and has happened -- elsewhere.
There must be caring, compassionate and competent healthcare professionals at Parkland. So, where were they? How could staff allow such wholesale chaos to occur? Were attempts to bring these potentially lethal threats to patient health and safety to light ignored or discouraged by hospital leadership? Or were the systemic failures at Parkland so great that staff simply gave up trying?
What would drive a considerable number of educated, competent, compassionate and decent healthcare professionals at Parkland to ignore the safety and well-being of their patients? How did these healthcare professionals get to this painful point?
Nearly one-third of the nation's midsized and larger businesses say they're not sure if they'll continue to offer healthcare coverage to their employees through 2014, when key provisions of the healthcare reform law take effect.
Towers Watson reports that 29% of the 368 businesses it surveyed had not decided if they would continue employer-based sponsorship for healthcare, or offset the loss of healthcare benefits with an equivalent salary increase. In the same survey, 54% of businesses said they would discontinue healthcare benefits to both pre-65 and post-65 retirees.
"With so much still unknown regarding both the short- and long-term impact of healthcare reform, most employers will not make wholesale changes to employer-sponsored health plans in 2012," Ron Fontanetta, senior health care consulting leader at Towers Watson, said in the report.
"However, a small group of employers is driving more fundamental change in 2012 by using account-based platform designs, aggressively positioning incentives, and rethinking subsidization levels."
The survey found that employer healthcare costs are projected to rise by 5.9% in 2012, compared with the 7.6% cost growth in 2011. Even with the slowing rate of healthcare inflation, 88% of employers said they will take steps to control their costs and avoid the impact of healthcare reform's excise tax.
Roughly half (45%) said they will rethink their long-term healthcare strategy in 2012, and many businesses said they don't know how they will respond to the impact of state-based insurance exchanges in 2014.
For 2012, the survey projected that the average reported annual cost of medical and pharmacy coverage will be $11,204 per employee for active coverage. Two-thirds of employers will increase employees' share-of-premium contributions for single-only coverage for 2012, and 73% will increase them for employees with dependent coverage.
"It is clear from our research that employers remain committed to providing employer-sponsored benefits for the foreseeable future," Randall Abbott, senior healthcare consulting leader at Towers Watson, said in the report. "2012 will ultimately be a defining year— the year some employers head down a path of bold and decisive actions, while others will wait and see. Whether choosing to pay or play, employers will need a strategic view for the future."
Cost shifting is expected to continue well beyond 2012. By 2013 or 2014, the survey showed that 23% of employers are considering significantly reducing their subsidization of coverage for spouses and dependents, and 19% are considering spousal waivers and surcharges when other coverage is available.
Now, only 5% of employers have, or plan to encourage, performance-based payments to providers based on the health status of plan participants by 2012, but an additional 26% are considering the implementation of this strategy for 2013 or 2014.
Robert Zirkelbach, press secretary for America's Health Insurance Plans, told HealthLeaders Media that the healthcare reforms will place a tremendous burden on the nation's businesses, in part because the emphasis is on expanding coverage and not containing costs.
"The new healthcare reform law imposes billions of dollars in new healthcare taxes and benefit mandates that will make it even harder for employers to continue offering coverage to their employees," Zirkelbach says. "In order to make healthcare coverage more affordable for families and small businesses, there needs to be a much greater focus on the underlying cost of medical care that is driving up the cost of coverage."
By a narrow majority, 53% of employers said they are confident that healthcare reform will be implemented on schedule, but 70% are skeptical that health insurance exchanges will provide a viable alternative to employer-sponsored coverage for active employees in 2014 or 2015.
Along with that uncertainty, 56% of employers believe that they will trigger the excise tax by 2018. Yet more than three-quarters believe that healthcare benefits will continue to be a key component of their employee compensation beyond 2014.
Between now and 2014, employers are planning or considering the following actions:
Increase offering of account-based health plans (17% intend to add this plan design in 2013 or 2014, which would result in nearly three in four [74%] employers offering an ABHP)
Use value-based benefit designs(49%)
Increase use of preferred networks (58%)
Further strategy changes in 2014 and 2015 include:
Substantially reduce the health care benefit value of active employees (47%)
Reduce employee health care contributions for lower-paid workers (57%)
The survey also found that:
70% of employers expect to lose grandfathered status by 2012.
57% of employers are considering rewarding or penalizing their employees based on biometric outcomes (versus 8% today).
32% don't offer healthcare coverage to part-time employees.
44% of employers now use or are considering using social media tools to impact employee health and well-being (versus 14% today), and 26% currently support or are considering supporting employee health management with the use of online games (versus 9% today).
Executives at Henry County Medical Center in Stockbridge, GA announced Wednesday that the 215-bed community hospital will affiliate with Atlanta-based Piedmont Healthcare.
"I am truly excited about what Piedmont Healthcare will bring to our hospital and to the citizens of Henry County," Jeff Mills, chairman of the Henry Medical Center Board of Directors, said in a joint media release with Piedmont Healthcare. "During our exhaustive selection process, Piedmont demonstrated they were the right partner for Henry Medical Center."
The deal creates a long-term lease from the Hospital Authority of Henry County and a reconstituted Board of Directors of Henry Medical Center, which will become a subsidiary of Piedmont Healthcare.
"We look forward to sharing our experience with Henry Medical Center and the Henry County community – a strong spirit of collaboration, the highest quality of care, and our solid track record and success in running community hospitals," said R. Timothy Stack, president/CEO of Piedmont Healthcare.
Not-for-profit Piedmont Healthcare now operates four hospitals in Georgia
The affiliation is expected to be in place by January, pending regulatory approval.
Under the deal, Piedmont Healthcare has agreed to:
Reconstitute the Henry Medical Center Board with majority representation by community members and physicians, although Piedmont executives will also serve on the board;
Meet all commitments made by HMC to the authority related to the provision of care to the uninsured and the indigent, and to the provision of community benefits;
Guarantee obligations of existing bond debt of HMC;
Free Henry County of its obligation to pay HMC $6 million a year for indigent care.
Work with HMC to establish new clinical services and expand existing services;
Provide sufficient funds for capital investments;
Continue HMC's support to community organizations, including local educational institutions.
Piedmont Healthcare is the parent company of flagship Piedmont Hospital, a 481-bed acute tertiary care hospital in Atlanta. Other hospitals in the system include: Piedmont Fayette Hospital, a 157-bed, acute-care community hospital in Fayetteville; Piedmont Mountainside Hospital, a 42-bed community hospital in Jasper; and Piedmont Newnan Hospital, a 143-bed, acute-care community hospital in Newnan. The health system also operates the Piedmont Heart Institute, and the Piedmont Physicians Group, with more than 140 multispecialty physicians.
Stockbridge is located about 17 miles southeast of downtown Atlanta.
Using a hospital safety checklist to reduce deadly bloodstream infections can save lives and produces a tenfold return on the cost of the program, a study from Johns Hopkins shows.
The study calculated that the reduction in bloodstream infections at intensive care units in hospitals across Michigan saved an average of $1.1 million a year.
"We already knew that the Michigan project saved lives and reduced infections," Peter J. Pronovost, MD, the lead author of the study and the director of Johns Hopkins' Armstrong Institute for Patient Safety and Quality, said in a media release. "Now we know that by preventing infections, hospitals actually save money too."
The study showed that each central line-associated bloodstream infection in Michigan costs a hospital an average of $36,500 to treat. The patient safety program cost roughly $3,375 per infection averted between 2003 and 2005. The cost of putting the program in place -- mostly in devoted staff time -- was an average of $161,000 per hospital.
"It makes common sense that giving higher quality care would save you money, but before this, there was very little empirical evidence that it did," Pronovost said. "Now we have it."
Pronovost said his study does not show whether other quality improvement initiatives would yield similar financial benefit, but he said that some likely will.
Each year roughly 80,000 patients with central lines develop life-threatening infections. Of those, about 31,000 are estimated to die — nearly as many as die from breast cancer annually.
The collective cost of treating them may be as high as $3 billion nationally, according to the U.S. Centers for Disease Control and Prevention. CDC reported bloodstream infections decreased by 58% between 2001 and 2009.
The Michigan program, developed at Johns Hopkins, includes the "cockpit-style" checklist for doctors and nurses to follow when placing a central-line catheter, and five basic steps from hand washing to avoiding placement in the groin area, where infection rates are higher. The program also promotes a "culture of safety," that includes science of safety education; training in identifying safety problems, implement solutions, and measure improvements; and empowering team members to question each other and stop procedures if safety is compromised.
Pronovost said much of the healthcare savings resulting from the initiative go to insurers — both public and private — who are spared the cost of treating these bloodstream infections and subsequent complications. Because of that, Pronovost said insurers should help hospitals implement and develop infection prevention and other quality improvement programs.
"Strategies to improve quality should be at the forefront of efforts to trim healthcare costs. Reducing preventable harm may be the least controversial way to save money and should definitely get more attention," he said.
The research was funded by Blue Cross and Blue Shield of Michigan, through the Michigan Hospital Association.
St. Joseph's Women's Hospital has opened its $75 million 64-suite neonatal intensive care unit, which houses 15 Level II and 49 Level III beds, the Tampa, FL hospital announced.
The NICU occupies two floors of the five-story addition that also doubles the size of the hospital's breast imaging center.
The Hinks and Elaine Shimberg Breast Center on the ground floor provides diagnostic tools and resources including CT scanner, ultrasound, DEXA scan, digital mammography, MRI, Computer-aided Detection and minimally invasive biopsies. There, patient care is coordinated by an interventional team that includes board-certified radiologists, physician assistants, biopsy technologist, nurse navigator and biopsy scheduler, St. Joseph's said.
The expansion also includes 36 private patient suites for new mothers and a dedicated 16-bed gynecology unit for medical and surgical patients. A staff nurse navigator provides resources for the patients and their families, the hospital said.
The expansion features:
All private NICU suites with an in-room family area
All-digital diagnostic imaging services
All-private suites for Women's Care patients (obstetrics, gynecology, surgical) with full bathroom and in-room family area
Each NICU private room provides a "womb-like setting" to help premature babies develop faster, improve patient safety, and better accommodate families, St. Joseph's said in a media release.
St. Joseph's Women's Hospital is part of 10-hospital, not-for-profit BayCare Health System and is the only hospital in the Tampa Bay area dedicated to women and infants.
While thumbing through the Internet recently I came upon a story from the Indianapolis Star about a new anti-smoking policy at Indiana University Health that extends a smoking ban for hospital employees during their off-campus break times.
The Star article called the ban “one of the most restrictive smoking policies in the nation.”
That is not accurate. Other health systems are far more aggressive. A growing number of providers, for example, have said they will no longer hire smokers, and will screen job applicants for traces of the vile weed. Now that’s restrictive!
Sheriee Ladd, senior vice president for human resources at IU Health, tells HealthLeaders Media that the health system sees its ban as one that can be justified as patient safety issue.
“We have told our employees that as the leading health system in the state, it is incongruent with our brand assurance to our patients and our commitment to wellness for our staff for us to continue to tolerate smoking, because of the irritants that come back into the workplace, not only for the employees but for the patients and their families,” Ladd said.
Of course, there is also an HR component at play. Employee smoking and obesity are among the biggest healthcare cost drivers for employers. If a ban on break-time smoking off-campus also encourages employees to quit smoking, everybody wins.
IU Health has discovered what many of the nation’s hospitals and healthcare providers have come to understand: They must be the tip of the spear in tobacco cessation and other broad public health initiatives.
First, as Ladd points out, it’s a patient safety issue. Second-hand smoke is dangerous. The stinky residue contains carcinogens that can prompt allergic reactions or asthma attacks among patients, their families, and coworkers. A British study last year attributed about 600,000 deaths globally each year to second-hand smoke.
Second, healthcare is a labor-intensive field. More than 14 million Americans are employed in healthcare. IU Health has 24,000 employees statewide. If a large sector of the economy that is dedicated to the well-being of others cannot take the lead controlling a huge societal cost driver for employee healthcare, who will?
Finally, healthcare sets the example for the rest of the nation to follow. It’s hard to lecture patients about the dangers of smoking, when they look out your hospital window and see a half-dozen caregivers in green scrub suits sparking up on the loading bay. Nobody should smoke -- particularly anyone who works in healthcare. They can’t plead ignorance.
All the hospital and health system executive I have spoken with who back aggressive anti-smoking policies for employees also point out that their systems offer smoking cessation classes and other help for employees who want to quit.
Health plans have medical alternatives, such as the patch.
Nicotine is highly addictive, and many smokers are hooked. To take a Zero Tolerance anti-smoking policy and firing violators without offering them the tools to quit would violate the same healing mission that the hospital is trying to protect. Smokers are not bad people. They are addicts.
At IU Health, for example, employees who violate the on-duty smoking ban are first counseled by a supervisor, given a written warning, and given a written invitation to join the hospital’s Quit For Life smoking cessation program. “If there are repeat offenses, they ultimately could be terminated, but that is just like any other policy,” Ladd says. “Our values are not that we are a mean-spirited organization but we are saying to our employees this isn’t helping our patients. It’s not safe. And you can’t do that to our patients.”
In previous columns I have questioned the right of employers to dictate what employees can do on their own time. And – justified as it may be as a matter of health and economics -- I am still very uneasy with the idea of removing smokers as job candidates. Smoking tobacco is legal. And if banning people for using a legal product is done in the name of controlling health insurance costs, then the slippery slope argument begs the question, what’s next? Bans on pizza and beer after work? Will diabetics be the next class of workers to be banned from the workplace? After all, much of Type 2 diabetes is related to diet, which is a lifestyle choice.
The distinction with smoking cessation that should be made for the healthcare sector is the very nature of the healing mission. Healthcare can make the case that employees who smoke directly and negatively impact the people they are hired to serve.
IU Health has it right. Promoting smoking cessation in hospitals and in the provider community is a patient health issue. That by itself is a strong enough justification. The fact that it will also improve employee health, and quality of life, and lower employee healthcare costs is a bonus.
Sanford Health has unveiled its plans for an "X-shaped" $360 million, 371-private room Sanford Fargo Medical Center that the health system is calling the largest project of its kind in North Dakota history.
"Designing a new medical center from the ground up is an extraordinary opportunity to do things right for our patients," Sanford Health President/CEO Kelby Krabbenhoft said in a media release.
Sanford has committed to more than $600 million in construction projects and facilities improvements in northern Minnesota across the Dakotas. On Aug. 17, the health system announced the Edith Sanford Breast Cancer Center named in honor of philanthropist Denny Sanford's mother. It includes a new building in Sioux Falls and an expansion in Fargo.
Earlier in the month it announced the $60 million Sanford Thief River Falls Medical Center and Clinic in Minnesota.
The design of the "X" shaped Fargo hospital is intended to facilitate integration between the hospital and clinics. Room for growth at the current facilities, facility design limitation, and aging buildings were given as the main reasons for the new hospital.
About 58% of Sanford's downtown Fargo campus patients come from outside the area. However, downtown Fargo is difficult to navigate with multiple railroad crossings and congested traffic. The threat of flooding is also a factor – many of the downtown campus buildings are antiquated and the campus is land-locked.
By 2015, it is estimated that 7,178 Sanford employees will be needed to serve 200,000 people in the Fargo-Moorhead metro area. Sanford currently employs more than 5,600, the health system said.
"We believe we are building a healthcare campus of the future and providing new facilities which will support innovations in care and research discoveries close to home for all our communities," Lauris Molbert, Sanford Board of Trustees vice-chair said in a media release. "Through these developments, we are ensuring that our health system meets its goal to improve and expand access to the highest quality care."
Groundbreaking is expected in 2013, with completion in 2016. The 704,000 square foot, 11-story hospital will house Sanford's medical and surgical services, emergency medicine, and Centers of Excellence for heart, children's, women's, orthopedics/sports medicine. Highlights include: 30 operating rooms, 10 heart catheterization/interventional labs, 40 emergency treatment/trauma rooms, 300 clinic exam rooms, and space for 200 physicians and 2,700 employees.
In addition, Sanford plans a $30 million facilities upgrade for the Roger Maris Cancer Center at the downtown campus, which will be home to about 2,000 employees and will occupy about 200,000 square feet with 220 private rooms.
As the projects get underway, the Sanford Health Foundation will launch The Building Tomorrow Today Campaign to raise $50 million in endowment funding for perpetual support for the new facility, its programs and services, Sanford said.
Sanford Health is the largest, rural, not-for-profit health care system in the nation with a presence in 112 communities in seven states. The system includes 34 hospitals, 116 clinic locations and more than 900 physicians in 70 specialty areas of medicine. With more than 20,000 employees, Sanford Health is the largest employer in North and South Dakota.
The costs of Medicaid's brand-name drugs grew at about three times the rate of inflation from 2005-2010, but that increase was offset by rebates to state programs, a federal audit shows.
The report from the Department of Health and Human Services Office of Inspector General found that brand-name drug payments by state Medicaid programs grew between 34% and 40% for the five year period, while overall inflation grew only 13%.
"For the 50 Medicaid brand-name drugs with the highest expenditures, total median increases in prices and payment amounts not only outpaced the inflation rate, but also outpaced total median increases in prices and payment amounts for brand-name drugs as a whole," the audit said.
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However, the audit also found that when drug manufacturers' rebates to state Medicaid programs were taken into account, "the per-unit net cost to Medicaid increased at a much lower rate than other points of comparison between 2005 and 2009 (rebate data were not available for 2010).
"In fact, Medicaid's rebate-adjusted payment amounts for brand-name drugs actually declined at the median in 3 of 4 years, lagging behind the inflation rate," the audit said.
The OIG study had been requested by U.S. Sen. Bill Nelson (D-FL) after AARP published its own study last summer showing a significant increase in the cost of brand-name prescription drugs since 2002.
The OIG study looked beyond the reported increases in published prices – which do not often represent the actual price that is paid -- and examined changes in transaction-based prices, and the financial effect of price changes on Medicaid.
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Since 2006, Medicaid payments for prescription drugs have remained relatively steady. In 2009, Medicaid drug expenditures totaled approximately $26 billion (not including rebates). Brand-name drugs generally account for about 80% of the total dollars reimbursed. However, Medicaid recouped approximately one-third of its costs for prescription drugs between 2006 and 2009, an average annual savings of about $8 billion, OIG said.
Drug makers pay higher rebates for brand-name drugs than for generic drugs. From 1996 to 2009, the unit rebate amount (URA) for a generic drug was 11% of the wholesale price and the basic URA for a brand-name drug was the around 15%, OIG said.
The average per capita cost of healthcare services covered by commercial insurance and Medicare grew 5.61% over the 12 months ending in June 2011, representing a second straight month of modest acceleration of cost growth, Standard & Poor's Healthcare Economic Indices show.
The index posted its lowest annual growth rate in its six-year history -- +5.37% in April 2011. Since then, the rate of growth accelerated slightly in May and June. Healthcare costs easily outpaced the 3.6% growth in overall inflation as measured by the Consumer Price Index for the same 12-month period ending in June, Bureau of Labor Statistics data show.
"Although rates have been slightly up in most indices over the past two months, the overall story continues to be moderation in trends over the past 12-15 months," David Blitzer, chairman of the Index Committee at Standard & Poor's, said in the report. "As noted in prior reports, some market participants are reporting relatively low trends in office visits and hospital admissions, as well as steps being taken to address healthcare reform and control costs. If true, these could be contributing to these lower trends."
A further breakdown of the S&P data show that for the year ending June 2011, healthcare costs covered by commercial insurance increased by 7.48%, as measured by the S&P Healthcare Economic Commercial Index. During the same period, Medicare claim costs rose at an annual rate of 2.5%, as measured by the S&P Healthcare Economic Medicare Index. This was the lowest annual growth rate recorded for the Medicare Index in its history, which goes back to January 2005, S&P said.
The Hospital and Professional Services Indices reported increases of 5.16% and 5.89%, respectively, from their June 2010 levels. For the Hospital Index, this rate is slightly higher than the +5.08% posted in May 2011. The Professional Services Index is marginally lower than its +5.91% rate posted in May.
"Based on historic patterns, we also would expect a reduction in healthcare spending on a delayed basis following an economic downturn, due to the considerable lag between investments in healthcare and increased supply," Blitzer said. "So, much of the reduction in trends could be driven by reduced capital spending during the recession. We will need more data to determine whether the slight increase in the past two months is a temporary increase or if it is a sign that trends are beginning to rise."
The S&P Healthcare Economic Indices estimate the per capita change in revenues accrued each month by hospital and professional services facilities for services provided to patients covered under traditional Medicare and commercial health insurance programs. The annual growth rates are determined by calculating a percent change of the 12-month moving averages of the monthly index levels versus the same month of the prior year, S&P said.
The highest annual growth rate for the S&P Composite index in the past six years was during the 12 months ending May 2010, when it posted +8.74%.
It has taken less than nine years for healthcare costs to double for the average family of four covered by a preferred provider organization, the 2011 Milliman Medical Index shows.
