Hospitals that spend more money on emergency department care for cardiac patients have lower mortality rates for those patients, a Massachusetts Institute of Technology study has found.
"More intensive and expensive treatment leads to better outcomes," Joseph Doyle, the Alfred Henry and Jean Morrison Hayes Career Development Associate Professor of Applied Economics at the MIT Sloan School of Management, said in a statement.
In a paper published in the July issue of the American Economic Journal: Applied Economics, Doyle examined tens of thousands of cases in which out-of-state visitors were admitted to emergency rooms in Florida hospitals from 1996-2003. He discovered that an increase of about $4,000 per patient in hospital expenditures led to a 1.4 percentage-point decrease in the mortality rate. Overall, a 50% increase in what Doyle calls a hospital's "spending intensity" allows it to reduce mortality rates due to heart problems to about 26% below the mean, the study found.
The findings are sure to prompt more debate about the linkage between cost and quality care.
Some previous studies have shown that patients who receive more-expensive care do not necessarily have a lower mortality rates. Other studies, however, have shown that additional spending makes a difference, or that hospitals that spend more money with similar outcomes may be treating sicker patients.
In an attempt to reduce the impact of local patient variations on medical spending, Doyle's study examined nearly 37,000 hospitalizations in Florida from 1996 to 2003, using patient-discharge data available through the Florida Agency for Healthcare Administration.
Doyle analyzed the patient data by ZIP code, age, and even season of the year to make sure that he was studying demographically similar tourists being treated throughout Florida.
Doyle said Florida is a microcosm of the nation, because the state has significant variations from place to place in how patients are treated for heart attacks, and per capita income for a particular area does not correlate with hospital spending.
As a result, the variations Doyle found do not stem from the prior health of patients, but from the level of care itself. Specifically, the greater expenses — and benefits — in heart treatment seem to come from a broader application of ICU tools and having more medical personnel on hand. "The higher-spending hospitals use more ICU services, and they have higher staff-to-patient ratios, so they use more labor. And that's expensive," Doyle said.
Doyle said he has yet to identify the precise medical technologies that provide the greatest additional benefit per dollar spent. "There are smart ways to spend money and ineffective ways to spend money, and we're still trying to figure out which are which, as much as possible," he said.
An Orange County, CA oncologist was sentenced to 18 months in federal prison Monday for bilking Medicare and other public and private health insurance providers for up to $1 million for injectable cancer medications that were never provided, the Department of Justice said.
Glen R. Justice, MD, who ran Pacific Coast Hematology/Oncology Medical Group in Fountain Valley, CA, pleaded guilty in May 2010 to five counts of healthcare fraud, DOJ said in a media release.
When patients did receive medications, Justice "upcoded" claims made to health insurance providers by falsely claiming that he administered more expensive injectable medications than were actually given to patients, DOJ said.
The medications involved in the scheme included Neulasta, Neupogen, Procrit/Epogen/Aranesp, and Neumega. Justice's scheme ran from at least 2004 through October 2009, despite being told by staff about the improper billing and the execution of a search warrant at his practice in 2006, DOJ said.
In a plea agreement Justice, 66, acknowledged that the public and private health insurance providers – including Medicare, Tricare, carriers contracted with the federal government through the Federal Employee Health Benefit Program, and Blue Cross and Blue Shield of California – suffered losses of between $400,000 and $1 million, DOJ said.
At Monday's sentencing hearing, Justice did not contest government claims that he violated his plea agreement by continuing to submit fraudulent bills after he signed the agreement in March 2010.
In addition to the prison term, Justice was ordered to pay $1,004,689 in restitution.
Median compensation for practice administrators in 2010 showed little change from 2009, according to the Medical Group Management Association's Management Compensation Survey: 2011 Report Based on 2010 Data.
Administrators in practices with six or fewer full-time-equivalent physicians earned median compensation of $86,459, a slight decrease from 2009. Administrators in practices with seven to 25 FTE physicians reported median compensation of $115,000—an increase of only 0.28% from 2009. In groups with 26 or more FTE physicians, administrators reported median compensation of $150,756, the MGMA report said.
Some medical practice management professionals reported slight increases in compensation, likely in recognition of expanded responsibilities. Business service directors, for example, reported a 5.7% increase in median compensation to $88,540. Branch/satellite clinic managers also saw a modest increase in median compensation to $57,510, up 2.57%. Marketing/communications specialists earned median compensation of $49,262, up 0.74 percent since last year, the report said.
"The generally static compensation of practice management professionals reflects the difficult economic environment faced by medical practices," MGMA President/CEO William F. Jessee, MD, said in a media release detailing the report. "Flat or declining revenues in the face of continuing increases in operating costs are forcing many practices to sell or close. For those that are able to survive, compensation levels are generally flat or declining."
MGMA's Management Compensation Survey: 2011 Report Based on 2010 Data includes data on 7,240 managers in 1,287 medical practices.
Duke LifePoint Healthcare and the board of directors at Maria Parham Medical Center on Monday signed a joint operating agreement for the 102-bed community hospital in Henderson, NC.
The deal, first announced Jan. 31, is expected to close within the next three months pending regulatory approval.
Duke LifePoint will own 80% of the hospital, while the retained assets and the proceeds from the deal will eliminate MPMC's debt. The remaining assets, approximately $30 million, will be used to create a locally governed charitable foundation that will fund new programs and services in the community. Duke LifePoint also will invest $45 million in capital improvements at the hospital over the next 10 years, the partners said.
David Ruggles, a spokesman for the private, nonprofit Maria Parham, said specific financial terms of the deal would not be made public until it is approved by the North Carolina Attorney General's Office.
"The MPMC board of directors evaluated potential partnerships for a year before selecting Duke LifePoint as our partner of choice," said Bev Tucker, MD, chairman of the MPMC Board of Directors. "Throughout our due diligence process, we have grown even more enthusiastic about this collaboration. Duke LifePoint brings unparalleled clinical and operational support to this community and can give MPMC the resources and expertise it needs to transform healthcare in Henderson and strengthen and grow our hospital."
To retain community control of the hospital, a 10-member board will be equally represented by Duke LifePoint and MPMC appointees. A separate hospital advisory board of physicians, community leaders, MPMC President/CEO Robert Singletary, and a representative from Duke LifePoint also will be established.
The deal marks the second affiliation with North Carolina hospitals for Duke Life Point. In June, the 110-bedPerson Memorial Hospital in Roxboro announced a similar affiliation agreement.
Duke LifePoint said the collaboration provides the affiliated community hospitals with LifePoint's operational resources and experience in managing community-based hospitals, and Duke's clinical services and quality leadership.
"We are delighted about the opportunity to welcome Maria Parham Medical Center as the first hospital in the Duke LifePoint system," said William J. Fulkerson, Jr., MD, executive vice president of Duke University Health System. "As part of Duke LifePoint, the hospital will have access to the support it needs to better serve its community and prosper in the future."
Located 50 miles north of Raleigh, MPMC serves north central North Carolina and parts of southern Virginia.
Brentwood, TN-based LifePoint Hospitals operates 52 hospitals in 17 states, and specializes in community hospitals in non-urban markets where the hospital is the sole provider in most of the communities it serves.
Duke University Health System has inpatient and ambulatory locations across North Carolina and surrounding areas, and has partnered with hospitals in its region to establish specialized medical services in their communities.
A couple of months back I noted in this column that the American Society for Healthcare Human Resources Administration was conducting its 2011 Healthcare HR Initiatives Survey to discern the priorities of healthcare human resources executives.
The results are in and they mostly confirm what we already know: Healthcare HR executives are focused on retaining talent, and improving employee engagement as a means to enhance safety and patient satisfaction. These executives are doing all of this with an eye toward healthcare reform, and its impact on care delivery and reimbursement.
To me, even more telling is the nature of the questions themselves. They demonstrate that HR executives at successful healthcare organizations are still involved in the critical daily tactical operations that make complex healthcare organizations function. But the questions also show that those same executives have made the leap from tactical tasking to strategic thinking.
More than any other area of healthcare leadership, HR straddles a unique position between the strategic long view, and the rubber-hits-the-road tactical implementation. At the strategic level, it's about matching the employee with the mission. At the tactical level, it's about giving the employees the tools, training, and support they need to prosper.
Before we go on, let's look at some of the findings from the ASHHRA survey. Respondents were asked:
What are your HR initiatives to cut costs?
Streamline HR Processes (69% of respondents chose this)
Improve retention rates (66%)
Reduce reliance on agencies and temporary workers (34%)
Redesign compensation and benefits plans (32%)
What are your HR initiatives to improve patient satisfaction?
Align our workforce with our organization's mission and core values (64%)
What are your HR initiatives to improve patient safety?
Improve workforce education and development (67%)
Improve employee satisfaction (60%)
Identify and manage out low performers (59%)
Improve retention rates (49%)
Biggest challenges with achieving your HR initiatives?
Not enough time to focus on the important projects (62%)
Too many competing initiatives (56%)
No budget to implement programs (47%)
Inefficient systems, inadequate technology (43%)
What new technology are you planning to adopt to achieve your HR initiatives?
Performance management (appraisal) software (36%)
Social Media for recruiting (32%)
Time and Attendance/Workforce Scheduling Absence (24%)
Behavioral Assessments (24%)
It is heartening and reaffirming to see that HR understands – and is embracing -- its dual strategic and tactical roles in improving patient satisfaction and safety through employee engagement. Common sense -- and a growing body of practical experience -- tell us that neither of those critical quality benchmarks can be improved upon unless employees are happy and buy into the healing mission.
That engagement starts with HR's role in shaping the healing mission at the strategic level. On the tactical side, it is HR's job to help new employees during the recruiting and orientation process, using that introductory period to affirm the organization's mission. Good HR executives understand the need to developing tools, benefits, training programs, favorable scheduling options, and other processes that demonstrate management's commitment to staff, actions that help the employee grow with the organization
The "challenges" with the job that are detailed in the survey also point to the inherent frictions in HR's dual role. It's difficult to articulate long-range strategic HR goals when there isn't enough time, or there are too many competing initiatives clouding the picture, or the budget is too small, and the technology is antiquated.
No doubt these are frustrating practical problems that should be addressed. But they should not distract us from the fact that healthcare HR has gone strategic.
The Federal Trade Commission has ordered Cardinal Health, Inc. to sell nuclear pharmacies it bought two years ago from Biotech in Las Vegas, NV, Albuquerque, NM, and El Paso, TX. In a proposed settlement order this week, the FTC said the deal reduced competition for low-energy radiopharmaceuticals in the three southwestern cities.
In an e-mail to HealthLeaders, a Dublin, OH-based Cardinal Health representative said: "After our acquisition of Biotech, the Federal Trade Commission (FTC) began an inquiry into the effect that the acquisition may have had on nuclear pharmacy competition in El Paso, Albuquerque and Las Vegas. We cooperated fully with the FTC inquiry and have voluntarily agreed to sell our three former nuclear pharmacies located in El Paso, Albuquerque and Las Vegas."
Before the July 2009 purchase, Cardinal and Biotech both operated nuclear pharmacies that produced, sold, and distributed low-energy radiopharmaceuticals in the three cities. After the acquisition, Cardinal relocated its nuclear pharmacy businesses to the former Biotech nuclear pharmacies and closed its own, FTC said.
Cardinal now holds a low-energy radiopharmaceuticals monopoly in Albuquerque. In El Paso, Cardinal held a monopoly until November 2010, when another nuclear pharmacy opened in the city. Cardinal still holds a large market share in El Paso. In Las Vegas, there were three competitors before the acquisition, and Cardinal and Biotech were the two leading providers. As a result of the acquisition, Cardinal obtained, and has since held, a large market share, FTC said.
The FTC order requires Cardinal to:
Reconstitute the three nuclear pharmacies it had operated in these markets prior to the acquisition, and sell each one to an FTC-approved buyer;
Divest to each buyer the intellectual property related to the nuclear pharmacies that Biotech owned before the acquisition;
Obtain, maintain, and transfer all regulatory approvals, licenses, permits, clearances, and other assets needed to operate the pharmacies being acquired;
Demonstrate to the FTC that each buyer has a supply of two vital low-energy radiopharmaceutical inputs, the radioisotope technetium 99 and a heart-perfusion agent;
Grant customers in Las Vegas, Albuquerque, and El Paso a two-year right to terminate – without penalty or charge – their existing contracts with Cardinal to buy low-energy radiopharmaceuticals. This will ensure that the new buyers can compete with Cardinal for business. Cardinal must notify customers of their right to terminate existing contracts;
Facilitate and not interfere with the new buyers' recruitment of former Biotech employees and current Cardinal nuclear pharmacy employees in the three cities, and releases employees from restrictions on their ability to work for the new buyers.
If new buyers are not found within six months, FTC said it may appoint a divestiture trustee to carry out the sale.
The FTC appointed Katherine L. Seifert, of Seifert and Associates, Inc., to serve as an independent monitor.
Following a 30-day public comment period that ends Aug. 22, the FTC will decide whether to make permanent the proposed order.
A consent order is for settlement purposes only and does not constitute an admission of a law violation.
Cardinal Health's statement to HealthLeaders further said: We will continue to operate our current nuclear pharmacies located in El Paso, Albuquerque and Las Vegas. Through the Biotech acquisition, Cardinal Health expanded our presence in PET manufacturing by adding additional cyclotrons to our network. These cyclotrons are not part of the sale offering. We intend to complete the sale of our three former nuclear pharmacies later this year. The sale of these nuclear pharmacies will not have a significant impact on Cardinal Health's financial performance.
The average per capita cost of healthcare services covered by commercial insurance and Medicare grew 5.58% over the 12 months ending in May.
The slight uptick in cost growth ends what had been 11 consecutive months of deceleration, as measured by the Standard & Poor's Healthcare Economic Indices.
Even with May's uptick in cost growth from the all time low of +5.37% posted in April, the rate of cost growth remains 3.16 percentage points below the highest rate for the Composite index, which was up 8.74% over the 12-months ending May 2010.
A further breakdown for the 12-month period ending in May 2011 shows that annual claims costs covered by commercial insurance increased by 7.35%, in the S&P Healthcare Economic Commercial Index. Medicare claim costs rose 2.64%, in the S&P Healthcare Economic Medicare Index. The Commercial and Medicare Indices are respectively 0.25 and 0.16 percentage points above their April annual rates.
"Over the past 12-15 months, the story has been a moderation in the rate of increase in healthcare cost, as indicated by the decelerating growth rates across the S&P Healthcare Economic Indices," David M. Blitzer, Chairman of the Index Committee at S&P Indices, said in a media release. "In fact, the Composite, Medicare and Hospital Indices all posted record low annual rates in their six-year history with April's report. Since May's data covers only one month, we need more time to determine if the trend is changing or if this is a temporary blip, like we saw in January.
Cost growth for commercial plans continues to outstrip cost growth for Medicare despite Medicare's older, sicker population and higher use of services.
"Unlike Medicare, throughout the past year the Commercial Index has remained well above its low annual growth rate of +6% posted in September 2005. Its May 2011 reading was +7.35%.," Blitzer said.
Lower volumes may be driving the deceleration in cost growth.
"In terms of what we are hearing from market participants, both office visit and hospital admission trends are relatively low, which may be a reflection of the overall consumer pullback in medical treatment," Blitzer said. "Furthermore, many participants have indicated that providers are trying to address healthcare reform and are looking for ways to control costs. If true, this combination certainly would be a contributory factor to the moderation in cost we have witnessed since early 2010."
S&P's Hospital and Professional Services Indices also reported increases of 5.08% and 5.91% respectively, slightly higher than the respective +4.85% and +5.71% posted in April.
Even with the deceleration, healthcare costs grew at nearly double the 3.4% growth in overall inflation as measured by the Consumer Price Index for the same 12-month period ending in May, Bureau of Labor Statistics data show.
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.
Baystate Health said it will eliminate 354 jobs from its payroll --- including 169 filled positions -- to help offset financial woes that the Springfield, MA health system blames mainly on lower patient volumes and reduced Medicaid reimbursements.
Baystate projects a $25 million budget shortfall in 2011 growing to $54 million in 2012 unless expenses are reduced.
“At Baystate Health, we embrace changing models of patient care and health coverage expansion – however, these changes are not based on a properly funded plan,” Mark R. Tolosky, president/CEO of private, not-for-profit Baystate Health, said in a media release. “Massachusetts has expanded and enhanced healthcare for our residents which we applaud – but the Commonwealth is not paying for these commitments.”
Tolosky said Massachusetts healthcare providers are faced with freezes in reimbursements for patient care by Medicaid and other state programs while medical inflation is rising at 3% - 4% annually, and that Baystate is paid less than the cost of the care it provide.
The three hospitals of Baystate Health -- Baystate Medical Center in Springfield, Baystate Franklin Medical Center in Greenfield, and Baystate Mary Lane Hospital in Ware -- were underpaid $26.5 million by the state government for the cost of care for Medicaid patients in 2010. Medicaid patients represent 26% of the patient population at Baystate’s hospitals, resulting in significant financial loss for care of these patients.
With declining reimbursements, Baystate and other healthcare providers throughout Massachusetts are seeing patients hold back on medical care for reasons that include increased out of pocket costs and concern about time away from their jobs, all which have led to lower patient volumes.
Baystate Medical Center will bear the brunt of the layoffs, with 158 positions eliminated. Baystate officials declined to say what staffing areas were targeted for cuts, which will take effect Aug. 19. They said the cuts would not impact patient care. The 354 funded payroll cuts represent 3.5% of the 10,064 positions at Bayhealth.
Adventist Health has restructured its regional operations to create a new five-hospital network in northern California, the Roseville, CA-based health system has announced.
The newly named Northern California Network includes:
Frank R. Howard Memorial Hospital in Willits;
St. Helena Hospital Center for Behavioral Health;
St. Helena Hospital Clear Lake;
St. Helena Hospital Napa Valley;
Ukiah Valley Medical Center, in Ukiah,
The hospitals' service sites
Scott Reiner, executive vice president/COO and board chairman of the St. Helena Hospital region, said restructuring will strengthen operations across the region, as the five hospitals work toward a coordinated business model.
Terry Newmyer, president/CEO of the St. Helena Region, will assume the additional duties of vice president of Adventist Health and president/CEO of the Northern California Network. Before being appointed as president and CEO of the St. Helena region in 2009, Newmyer was senior vice president of business development for the Florida division of Adventist Health System and the chief development officer for the Florida Hospital Foundation.
"Terry's leadership of the St. Helena hospitals has been exemplary and their successes are well-documented,"" Reiner said. ""His guidance over the Northern California Network will allow us to expand services to communities throughout the region. Through business collaboration and care coordination, we will ensure patients experience excellence across the continuum of care."
Newmyer will lead the searches underway for the CEO positions at HMH and UVMC. Bill Wing, senior vice president of Adventist Health, will continue to chair the boards for HMH and UVMC.
Adventist Health is a faith-based, not-for-profit integrated healthcare delivery system with nearly20,000 employees in California, Hawaii, Oregon and Washington. The system includes 17hospitals with more than 2,500 beds, more than 130 physician and rural health clinics, 14 home care agencies and four joint ventureretirement centers.
The Medical Group Management Association says its survey shows that most practices want to become patient-centered medical homes, and finds challenges.
Nearly 70% of 341 physician leaders who replied to MGMA’s Patient Centered Medical Home Study: 2011 Report based on 2011 Data said were already in the process of transforming or interested in becoming a PCMH while more than 20% were accredited or recognized as a PCMH by a national organization.
The nationwide survey, conducted in April for Englewood, CO-based MGMA, found the 36% of practices interested in becoming a PCMH were in family medicine, followed by multispecialty practices with primary and specialty care (more than 30%), and pediatrics (more than 10%).
The study found that the top five most common processes practices engaged in as part of the PCMH model were:
Assigning patients to a primary care clinician (80%)
Addressing patients' mental health issues or concerns and referring them to appropriate agencies (70%)
Exchanging clinical information electronically with pharmacies (70%)
Involving patients and family members in shared decision making (70%)
Maintaining chronic disease registries (45%)
The study also indentified the top five challenges cited by PCMHs during their transformation:
Establishing care coordination agreements with referral physicians (50%)
Financing the transformation to PCMH (40%)
Coordinating care for high-risk patients (40%)
Modifying or adopting an EHR system to support PCMH related functions (40%)
Projecting financial effects (practice revenue, costs, etc.) of the transformation to PCMH (35%)
For existing PCMHs, 91% of study respondents said that they want one set of standards for PCMH evaluation. The majority of existing PCMHs were recognized through the National Committee for Quality Assurance; 70% of these reported earning Level 3 NCQA recognition. The accreditation or recognition process took the majority of respondents, on average, one year to complete.
Physician-owned practices represented less than 55% of accredited or recognized PCMHs compared to less than 25% for hospital-owned medical practices. Almost 45% of the respondents accredited or recognized as a PCMH were family medicine practices followed by multispecialty practices with primary and specialty care (almost 35%).
The survey also showed that as many as 75% of existing PCMHs reported they were participating in a pilot or demonstration. Ninety percent of pilot participants also were receiving fee-for-service payments from payers as part of the pilots and only 57% indicated receiving management fees.
