Employers will see healthcare costs increase by 8.5% in 2012, up slightly from 2010, as the economy continues to rebound, according to the annual Behind the Numbers report on medical cost trends from the PwC Health Research Institute.
That financial hit could be "contained" to about 7%, however, with increased cost-shifting to employees, PwC Principal Michael Thompson told HealthLeaders Media.
"There are three levers that employers are looking at. One is certainly cost-sharing. It has been demonstrated that cost sharing does influence how people use services," Thompson says. "On the negative side, part of the reason they mandated that cost sharing be eliminated for preventative services was so that people would use preventative services.
"Secondly is education on how to use the system more effectively. Thirdly, there has been a dramatic and continued focus from employers on making employees much more conscious and accountable for their own health behaviors," he says.
Containing healthcare cost growth to 7% will likely puts it on a track that is more than double that of overall inflation as measured by the Consumer Price Index, which grew at 3.2% between April 2010 and April 2011.
Healthcare inflation has been slowed over the last two years by the weak economy, Thompson says, but as the economy recovers, costs are increasing too. "To some degree we have found that healthcare costs actually grow as a percentage of the economy during down cycles," Thompson says. "Interestingly though, this year we found more of a reaction than we typically find. That has been reflected in somewhat decreased levels of utilizations, more than we have seen in past recessions. We attribute some of that to the fact that there has been much more cost sharing in the plans than we've had in years. As a result, employees have experienced more of the cost of services during the downturn and consequently have used fewer services during the last year or so."
Based on interviews with health plans, PwC had projected a 9% increase in employer medical costs for recession-wracked 2010 and 2011. However, low utilization led to adjusted estimates in the medical cost trend to 7.5% for 2010 and 8% for 2011 before benefit plan changes.
The end of subsidized COBRA coverage in 2010 is offsetting otherwise rebounding utilization growth rates so far in 2011, but employers and health plans expect pent-up demand to put upward pressure on the medical cost trend to continue into 2012, the PwC report said.
"Employers in particular continue to be very concerned about healthcare costs that are growing at substantially higher than the economy or their businesses or their wages," Thompson told HealthLeaders Media. "As a result they are continuing to focus efforts to dampen the increases that they are seeing."
The PwC report includes survey data from 1,700 employers in 32 industries, and interviews with hospital executives, health plan actuaries, and other healthcare sector executives. The medical cost trend is the projected increase in the cost of medical services assumed in setting premiums for health insurance plans.
PwC identified three factors that will inflate the medical cost trend in 2012:
1.Consolidation among hospitals and physicians. This trend is expected to accelerate as health reform incentivizes hospitals and physicians to align and form Accountable Care Organizations. Health plans are concerned that consolidation will reduce competition among providers and drive up payment rates.
2.Increasing cost shifting from Medicare and Medicaid. In 2012, the increase in Medicare inpatient hospital rates is expected to be 3.3 percentage points below the expected growth in their costs. Hospitals and health plans agree that much of the difference shifts to private payers.
3.Post-recession stress on workers. Money, work, and the economy -- found by the American Psychological Association to be the top three causes of stress among the American workforce between 2007 and 2010 -- are taking a toll. Health plans and employers interviewed by PwC say they are beginning to see more claims for stress-induced illnesses, which are highly correlated to unhealthy behavior and adverse health conditions such as heart disease.
Several factors will deflate medical costs for health plans and employers in 2012 -- but not necessarily for consumers. These factors are:
More cost shifting. Employers are increasingly shifting the burden of rising medical costs to employees through higher cost sharing. High deductible plans were the fastest growing plan designs in 2011, according to PwC's Touchstone survey. Seventeen percent of employers surveyed said high deductible plans were their most common benefit design, up 4 percentage points from 2010. The PwC study also notes that healthcare reform could contribute to cost shifting by further discounting Medicare rates for inpatient care.
Blockbuster brand-name drugs going off patent. In 2012, the cumulative sales of drugs going off patent will be the largest in history, representing approximately $28.1 billion in pharmaceutical sales according to PwC estimates. Increased use of generics will moderate health spending growth.
Tiering on out-of-network providers. Employers are increasing deductibles, making it far less attractive for workers to use out-of-network physicians and hospitals. Forty-four percent of employers in 2011 compared to 29% of employers in 2010 said that their out-of-network deductible had crossed the $1,000 threshold. In some markets, payers are becoming more selective about which providers are in the network, choosing to exclude higher-cost and premier hospital systems.
Thompson says the federal health reform law will have minimal effect on the medical cost trend in 2012. Provisions of the Patient Protection and Affordable Care Act that took place prior to 2012 were small changes for which employers already have fully accounted. Medicaid expansions, health insurance exchanges, subsidies to buy private insurance, mandates for employers to offer insurance and mandates for individuals to buy insurance don't take place until 2014 or later.
HealthSouth Corp. announced Wednesday that it will sell its six long-term acute care hospitals to LifeCare Holdings, Inc. for approximately $120 million, in a deal that is expected to be completed by September.
"The sale of these six long-term acute care hospitals to LifeCare reinforces HealthSouth's strategic focus on its 97 core, inpatient rehabilitation hospitals," HealthSouth President/CEO Jay Grinney said in a media release.
Grinney said Birmingham, AL-based HealthSouth will use the money from the sale to "invest in the retirement of our 10.75% senior notes and our accelerated de novo strategy. Most importantly, this divestiture does not change the company's outlook for 2011: We still expect our 2011 full-year results will be at the high end of, or greater than, the Adjusted EBITDA range of $440 million to $450 million."
Based in Plano, TX, LifeCare operates 20 long-term acute care hospitals in nine states. In a media statement, LifeCare chairman and CEO Phillip B. Douglas said, "Our company’s primary focus is the operation of long-term acute care hospitals. We look forward to sharing best practices across all of our hospitals and continuing to advance care for medically complex patients who require intensive treatment over an extended period of time.”
Coker Group analyst Mark Reiboldt said in an e-mail to HealthLeaders: "This one is probably more straightforward and perhaps less strategic relative to broader market trends. I imagine HLS recognizes where reimbursement and costs are heading for long-term care and they would likely be better served to focus on their core strengths in PT, rehab and other ancillary services. I read this as an opportunity to divest these assets, retire debt, and refocus on the company's core profitability. "
HealthSouth will work with LifeCare to transition the hospitals' employees and ensure there will be no interruption to patient care during the transfer to the new ownership. "We want to recognize and thank our highly skilled employees at these hospitals for their years of service and wish them the best under LifeCare's leadership," Grinney said.
The hospitals in the sale include:
HealthSouth Hospital at Tenaya, Las Vegas, NV;
HealthSouth Hospital of Houston, Houston, TX;
HealthSouth RidgeLake Hospital, Sarasota, FL;
HealthSouth Hospital of Pittsburgh, Pittsburgh, PA;
HealthSouth Specialty Hospital of North Louisiana, Ruston, LA, and two satellite locations, HealthSouth Hospital of North Louisiana — Farmerville, LA, and HealthSouth Hospital of North Louisiana — Homer, LA.
These hospitals contributed $121.7 million of net operating revenues and $17.5 million of Adjusted EBITDA to HealthSouth Corporation in 2010. They will be treated as discontinued operations beginning in the second quarter of 2011, HealthSouth said.
HealthSouth, which specializes in inpatient rehabilitative healthcare services, operates in 26 states and in Puerto Rico, with a network of inpatient rehabilitation hospitals, long-term acute care hospitals, outpatient rehabilitation satellite clinics and home health agencies.
Shareholders at Community Health Systems this week ignored the urging of one investor group and overwhelming re-elected three members of the board of directors – including CFO W. Larry Cash – during the company's 2011 annual meeting.
William Patterson, executive director of CtW Investment Group, in an April 21 letter to fellow shareholders, had called for the ouster of Cash, and board members James S. Ely III, and John A. Fry, "given their culpability for the growing scandal surrounding proper oversight of Medicare billing practices, which has precipitated a 25% decline in Community's market value."
Patterson was referring to Tenet Healthcare Corp.'s lawsuit filed in April claiming that Franklin, TN-based CHS overbilled Medicare by as much as $377 million using medically unnecessary admissions that improved its bottom line and appeal to investors.
A CHS filing with the Securities and Exchange Commission, however, showed that Cash easily won re-election on Tuesday by garnering 90.4% of the votes. Ely and fry each received 82.9%.
The vote appeared to be a vindication for Cash, Ely, Fry, and CEO/President/Chairman Wayne T. Smith, who vigorously campaigned for their re-election. However, it was also clear that the CtW campaign made some shareholders leery. Two other board members who were not the subject of the CtW ouster campaign, William Norris Jennings, MD, and H. Mitchell Watson, Jr., were reelected with 99.5% and 98.4% of the vote, respectively, the SEC filing showed.
CHS abandoned its hostile takeover bid for Dallas-based Tenet earlier this month, after the Tenet board unanimously rejected what CHS called its "best and final offer" of $7.25 per share cash, or about $4.1 billion. Tenet CEO Travis Fetter and Tenet board chair Edward A. Kangas said in a letter to Smith that the offer "grossly undervalues the company and is not in the best interests of Tenet or its shareholders."
Audits of the federal agencies charged with implementing and monitoring security measures for healthcare information technology identified this week lax oversight and insufficient standards for healthcare providers.
The audits were conducted by the Department of Health and Human Services' Office of Inspector General, and targeted HIT security standards, privacy protection under HIPAA, and other security measures at the Centers for Medicare & Medicaid Services, and the Office of the National Coordinator. "These two reports are being issued simultaneously because OIG found weaknesses in the two HHS agencies entrusted with keeping sensitive patient records private and secure," OIG said in a media release.
The CMS audit, Nationwide Rollup Review of the Centers for Medicare & Medicaid Services Health Insurance Portability and Accountability Act of 1996 Oversight, examined seven hospitals across the country and found 151 "vulnerabilities" in systems and controls that are designed to safeguard electronic protected health information.
Those lapses included 124 "high impact vulnerabilities" such as unencrypted laptops and portable drives containing sensitive personal health information, outdated antivirus software and patches, unsecured networks, and the failure to detect rogue devices intruding on wireless networks, the OIG audit said.
"These vulnerabilities placed the confidentiality, integrity, and availability of ePHI at risk. Outsiders or employees at some hospitals could have accessed, and at one hospital did access, systems and beneficiaries' personal data and performed unauthorized acts without the hospitals' knowledge," the OIG audit said. "As a result, CMS had limited assurance that controls were in place and operating as intended to protect electronic protected health information, thereby leaving ePHI vulnerable to attack and compromise."
OIG called on HHS' Office of Civil Rights to continue a compliance review that began in 2009 to ensure that controls are in place to protect ePHI at covered entities.
OIG's Audit of Information Technology Security Included in Health Information Technology Standards examined ONC's mandate under the HITECH Act to develop HIT security as part of a national HIT interoperability infrastructure. The audit found "no HIT standards that included general information IT security controls … which provide the structure, policies, and procedures that apply to a healthcare provider's overall computer operations, ensure the proper operation of information systems, and create a secure environment for application systems and controls."
OIG said the findings on ONC, when combined with vulnerabilities found in earlier audits of hospitals, Medicare contractors, and state Medicaid agencies, "raise concern about the effectiveness of IT security for HIT if general IT security controls are not addressed."
ONC concurred with the audits recommendations that it:
Broaden its focus from interoperability specifications to also include well-developed general IT security controls for supporting systems, networks, and infrastructures;
Provide guidance to the health industry on established general IT security standards and IT industry security best practices;
Emphasize to the medical community the importance of general IT security;
Coordinate with CMS and HHS' Office for Civil Rights to add general IT security controls where applicable.
Aurora Health Care President/CEO Nick Turkal, MD, says the Milwaukee-based healthcare system will not take part in the federal government's Accountable Care Organization pilot projects unless significant changes are made to the proposed rules.
Turkal told HealthLeaders Media that the proposed rules issued last month by the Centers for Medicare & Medicaid Services create a program where risks outweigh rewards.
"We had been very excited about the concept of ACO and Aurora has been designed around the concept of accountable care. But the pilot as designed by CMS doesn't match with what we expected and I don't think it matches with what a lot of providers expected across the country," Turkal said.
The Aurora Health chief joins a growing chorus of healthcare providers who are raising concerns about key components of the proposed rules, and says he plans to send a letter to CMS before the end of the comment period, pointing out his concerns and providing a list of recommendations.
Turkal said he believes the concerns he has for the ACO proposed rules are widely shared by other healthcare providers, particularly the capitation schedule that puts ACOs at risk in the third year.
"If you look at the end game, what are we trying to accomplish with an ACO pilot? I think what we are asking is 'is the model that is out there now going to get us there?'" he explained. "We think the answer may be 'no,' that it is designed in a way that moves a little too quickly towards capitation for many markets, and that has a quite rigid approach to quality and efficiency."
"If you move too many markets too quickly to capitation, then you haven't allowed the time for adjustment for patients, for physicians, for hospitals, to make that move in a way that doesn't impair quality or service to patients, or become just a huge financial burden," he continued.
Turkal says the anti-monopoly provisions put forward by the Department of Justice also could prove to be overly burdensome for integrated care systems like Aurora. "There is a regulatory review by market and it is broadly defined. If you have more than 50% of any market you have to go through a regulatory process for approval of a pilot," he says. "In a case like ours, where we are an integrated delivery system, anything where we exceed 50% would mean a review in that market. For example, if we have the predominant home care agency in a rural market we immediately have to go through a regulatory hurdle, even though the pilot wouldn't necessarily change our market share at all because we may be the only provider. So, it created a regulatory hurdle that seems to be pretty complicated for those of us who span several different markets. In our case it would require regulatory reviews in virtually all our markets."
Chris Van Gorder, President and CEO, Scripps Health, said in an interview with HealthLeaders Media shortly after the proposed rules were released, "Frankly, I was surprised. I thought there would be more carrots, not so much stick." His reaction, and that of his peers at other hospitals and health systems is in this report.
Turkal also expressed widely held concerns about the retroactive assignment of patients to ACOs after the first year, and the potential problems with data sharing, including the right of patients to limit access to personal health data. "I'm not sure it gives us the flexibility to work with our patients in a way that will make it successful," he says.
Turkal says CMS' willingness to make fundamental changes to the proposed rules could determine whether or not the ACO model success.
"The fundamental issue is if CMS has proposed a model which is not going to work," he says. "After the June 6 [end to the] public comment period, are they fundamentally going to change the model or is it going to be just some minor adjustments around the edges? The real answer is that without some fundamental change in CMS' current proposed model, there are not going to be many takers."
"If you were interviewing people 10 years ago and now, the difference now is those of us in healthcare are ready for change and we want to make it work. But the end goal has to be around enhanced care at a lower cost," he says. "We don't believe this is designed in a way that is necessarily going to get people there in an effective way. As it stands now we would not participate. We are hopeful that CMS and DOJ as they receive comments will morph this into something more useable."
According to the HealthLeaders Media Industry Survey 2011, more than half, (52%) of physicians surveyed said they expect to be part of an ACO within the next five years. That survey, however, was completed months before the proposed rules were released in April.
In the past three years, the extent of on-the-job violence that healthcare workers face has received a lot of media attention and public sympathy. That attention has created pressure on political leaders to provide legal protections for the millions of professionals who dedicate their lives to healing.
Last week, Vermont became the latest state to take a more aggressive stance against healthcare workplace violence. The Associated Pressreports that a new law in the Green Mountain State bumps up a misdemeanor assault to a felony when the victim is a healthcare worker on the job, with penalties ranging from up to a year in prison for first-time offenders to up to 10 years for repeat offenders. New York and Massachusetts recently passed similar laws, and the Emergency Nurses Association (ENA) says that several other states are focusing on the problem.
Will these laws end healthcare workplace violence? No. But they do reflect an increasing public awareness of the extent of assaults against healthcare workers. And, where there is informed public awareness of an issue, usually there is progress.
Let's review the numbers. Bureau of Labor Statistics data for 2008—the latest figures available—show 2,890 work-related assaults at hospitals. Remember, this reflects only assaults that are serious enough to inflict injury and force the victim to miss at least one day of work. Other BLS data show that for every 10,000 hospital workers, there were eight workplace assaults that resulted in missed work days.
By comparison, in the overall private sector, there were only 1.7 workplace assaults resulting in missed work for every 10,000 workers. An ENA nationwide survey found that between 8% and 13% of ED nurses say they are victims of physical violence every week. More than half (54.8%) of the 3,211 nurses ENA surveyed at three-month intervals between May 2009 to February 2010 reported physical or verbal abuse at work in the week before taking the survey.
ENA President AnnMarie Papa, RN, says she's happy with the strengthened protections for healthcare workers, and she's hopeful that more states will enact ENA model legislation that makes penalties for assaults on healthcare workers the same as assaults on police officers and firefighters.
She's quick, however, to call for more proactive measures that identify security risks in hospitals and other healthcare facilities before the violence occurs, and training programs that allow for healthcare professionals to defuse potentially violent encounters. Many of the ENA suggestions can be found in its workplace violence prevention tool kit.
"Most importantly, you need to have an organizational buy-in," says Papa, who is also interim director of emergency nursing at The Hospital at the University of Pennsylvania, in Philadelphia. "Zero tolerance is probably the one single most important factor for nurses. When we see that we know our organization is standing with us. We know they are on the front line, maybe not physically, but they are there to help us deal with these issues."
Papa says more and more hospitals are also doing a better job supporting their employees who've been assaulted on the job, although she says much work in that area remains to be done.
"If someone gets hurt at work, they break their ankle or there is a chemical splash, they have workers comp and other support. But often violence is overlooked as a worker's compensation issue. They have to use their vacation time or sick time to take time off," Papa says.
Also, Papa recommends that hospital leaders personally reach out to employees who've been assaulted on the job to offer their support. "I work in a Level 1 urban hospital in Pennsylvania. Whenever one of our nurses is the victim of violence, someone in our C-Suite calls that nurse to ask 'How can I help you?' Nine out of 10 times that nurses is going to say 'I'm fine. Thanks for the call.' But I can tell you that they talk about the fact that they received that call. They feel very, very supported."
The victims of assault are often frightened, angry, and confused. Imagine the impact that senior leadership could have on employee moral if the C-Suite is there both to support proactive antiviolence programs, and to offer assistance when on-the-job assaults occur.
If you're trying to build employee engagement in your healthcare organization, you can start by ensuring that you're there to support your employees when they are most vulnerable. They'll remember.
The American Medical Group Association warned this week that proposed rules governing accountable care organizations are "overly prescriptive" and "too burdensome," and will discourage physician participation.
In a letter to Centers for Medicare and Medicaid Services Administrator Donald Berwick, MD, AMGA President/CEO Donald W. Fisher warned that a survey of its members found that 93% would not enroll as an ACO under the proposed regulations.
According to the HealthLeaders Media Industry Survey 2011, more than half, (52%) of physicians surveyed said they expect to be part of an ACO within the next five years. That survey, however, was completed months before the proposed rules were released in April.
"Our membership's concerns were many and focused on issues such as the risk sharing requirement, static risk adjustment, retrospective attribution, quality measurement requirements, the Minimum Savings requirements and others," Fisher said in the letter. "Without substantial changes in the Final Rule, we fear that very few providers will enroll as ACOs and that CMS and the provider community will miss the best opportunity to inject value and accountability into the delivery system."
In an interview Thursday with HealthLeaders Media, Fisher said AMGA would provide a detailed critique of the proposed rules and a list of recommendations before the end of the public comment period on June 6. "We just sent this letter because we wanted to make sure that CMS was aware of the significant changes that need to be made, and let them know how serious these problems are. We didn't want to wait until the process had already started," he said.
Fisher detailed a list of concerns that AMGA would address in its formal comments.
Risk Adjustment: "We're concerned that CMS intends on adjusting the risks on ACOs costs calculations only for the first year, and these are three year agreements. Most of my members are very worried that they are going to get adversely selected against by frail and ill patients because the word will get out that these are high quality low cost organizations that do a terrific job taking care of patients. If you don't adjust after the first year and get an influx of patients that are much more severely ill than the first estimates gives, you are going to be risk adjusted incorrectly."
ACO Patient Attribution: "The attribution model that CMS is proposing is retrospective. They are going to do a look-back over three years to count the plurality of primary care visits to a facility. Whoever has the most gets that patient. They aren't going to have that until after the first year. So you are going to have to gear up to be an ACO, you are going to have to make an investment in the infrastructure, and you are not going to know who your patients are until after that first year. And, given that there is a 5,000 Medicare beneficiary minimum by statute, you might do all of these investments and find out you don't hit the 5,000 Medicare beneficiary threshold and you are out of the program. We would like to see them do a prospective patient attribution. Let's have these ACOs know who their patients are when they begin so they can make sure those patients are getting the care they need to improve quality and lower costs."
Minimum Savings Requirements: "If you go back to the group practice demonstration, which was 10 medical groups over five years, they had a 2% minimum savings to meet before they got into the shared savings program. In the proposed ACO regulations they have taken that 2% and raised it to 3.9%. If you talk to most of the medical groups who participated in the group practice demo, they had a difficult time getting to 2% over a five-year window. Many of them invested a lot more money than they ever got back. So when you take this up to 3.9% you are requiring a huge hurdle to be overcome by these medical groups financially before they get into the shared savings."
AMGA is the latest in a line of professional provider organizations that has raised concerns about the proposed rules for ACOs. Earlier this week, the College of Healthcare Information Management Executives complained that the ability of patients in accountable care organizations to restrict access to their personal health information is one of several huge hurdles.
In April, a slate of health leaders including the CEOs of Scripps Health, Alegent Health, Kaiser Foundation Hospitals, and Dean Health Systems weighed in with their responses to CMS' proposed regulations.
In its letter to Berwick, CHIME called for a re-examination of several sections of the proposed rules that it said would create significant pressures on ACOs.
Fisher told HealthLeaders Media that he is disappointed that CMS didn't use the lessons learned from the group practice demonstration project. "These requirements to become an ACO are much more stringent that what the group practice folks had to go through, and at the end of their five-year period they were able to demonstrate that they improved outcomes and saved money," Fisher said. "Why would you want to raise the bar even higher for the next level of participants in this experiment. The 2% minimum savings was the maximum for the group practice demo folks. Now we have raised it to 3.9%. They did have retrospective attribution and that was a real problem for them and they complained. We were hoping CMS would fix it, but they didn't."
Fisher said AMGA hopes to work with CMS to revise the rules, but AMGA is also prepared to go to Congress to ask for help if CMS is unwilling or unable to amend the rules. "This is the real opportunity in the Affordable Care Act to reform the healthcare delivery in this country. We want to see it work," he said.
WakeMed Health & Hospitals Thursday made a formal offer to buy Rex Healthcare from UNC Health Care System for $750 million, the Raleigh, NC-based health system said.
The offer, which had been under development by WakeMed for several months, was authorized by a unanimous vote of the WakeMed board of directors last week. An offer letter from Board Chair Billie Redmond and President and CEO Bill Atkinson was submitted Thursday to The University of North Carolina President Thomas Ross, WakeMed said in a media release.
"We strongly believe that the movement of Rex to the WakeMed system will greatly facilitate WakeMed's mission of service to the citizens of our area while also decreasing costs and providing efficiencies that would further support UNC's mission of providing academic-based patient care, research and teaching," Atkinson and Redmond said in their letter to Ross.
UNC Health Care and Rex Healthcare did not immediately return calls seeking comment Thursday. But the North Carolina News-Record quotes UNC Health CEO Bill Roper as saying in a phone interview Wednesday night, "Rex is not for sale. It's an institution that's a very important part of our mission to serve the entire state." The paper additionally reported that "Rex CEO David Strong sent an email to Rex employees late Wednesday dismissing rumors of a potential sale as 'outrageous and untrue.'"
Analyst Mark Reiboldt at the Coker Group, said in an email to HealthLeaders Media that "UNC has apparently said they're not interested in selling; however, WakeMed believes that Rex can be improved significantly under their model as opposed to a traditional academic system."
More specifically, Atkinson and Redmond said in their letter that the deal would benefit healthcare consumers and improve access in the Triangle area around Raleigh, because a combined system would cut duplicate services and coordinate complementary strengths of both systems.
"WakeMed has about $500 million in cash…and Rex makes the most sense at this point to gain a leg up on market share from competitors," Reiboldt said.
WakeMed said the $750 million offer represents "a significant percent return on investment" for UNC Health Care, the university system, and the state of North Carolina, which purchased Rex 11 years ago.
"WakeMed has proudly served the community for 50 years, and the system is currently in a very strong financial position with a healthy operating margin and significant cash reserves at a time when the state of North Carolina has a significant fiscal crisis affecting the state's university system and, as a result, UNC Health Care," the letter to Ross said.
"As consolidation is becoming more common, the traditional anti-trust regulations preventing not-for-profit hospitals from controlling too much share in a particular market is posing a major challenge that has already prevented deals from closing," Reiboldt said. He suggests anti-trust concerns may be weighing on the minds of the UNC board.
Reiboldt explained further, "The emerging trend is that more and more transaction bids are being guided by what is / is not likely to pass anti-trust hurdles. Sellers will not consider buyers that pose anti-trust concerns and vice versa. So, they will end up accepting an offer from another potential buyer that does not have the same regulatory barriers; however, this may not be what is best for either of the organizations, and the net result could be troublesome mergers that lead to poorer healthcare services and likely an eventual unwind or divestiture down the road."
While private, not-for-profit WakeMed was singing the praises of Rex Healthcare Thursday, the relationship between the two rival hospitals has not always been smooth.
Last November, WakeMed asked to look at the public records of UNC Health Care and Rex to determine if public money was used by either of the state-owned entities to duplicate and shift services to gain an unfair competitive edge. WakeMed alleged that UNC Health Care and Rex had taken "predatory actions" in Wake County that include recruiting doctors away from WakeMed.
Illinois state lawmakers are being urged to reject $463 million in proposed cuts to Medicaid payments that the Illinois Hospital Association says would cripple healthcare delivery and jeopardize patient access to care.
"These drastic cuts are wrong and unnecessary, and will only harm patients, hospitals, and the healthcare delivery system," IHA President Maryjane A. Wurth said in a media release. "Many hospitals across the state are already struggling to survive in the current economic downturn." The cuts are detailed in House Amendment #1 to House Bill 3717 – which was filed late Tuesday.
Late Wednesday the Illinois House Appropriations-Human Services voted 13 to 1 (and one present) to send its human services budget proposal, House Bill 3717, to the House floor. The proposal (which is a total of just under $12 billion) includes the Medicaid cuts.
Wurth pointed to a recent IHA survey that found that 90% of hospitals would be challenged to meet day-to-day operations, and nearly two-thirds would have to cut services and lay off staff if $300 million in Medicaid cuts were imposed under Governor Pat Quinn's budget plan. Quinn, elected in 2010, is a Democrat.
Illinois lawmakers are scrambling to fill a budget shortfall of between $1.5 billion and $2.4 billion by the end of May. A Senate budget bill calls for about $300 million in Medicaid cuts.
An IHA analysis this week found that the Medicaid cuts of $463 million, coupled with a $200 million cut to hospitals through proposed reductions to the workers' compensation medical fee schedule would increase by nearly 40% the number of hospitals operating in the red. That would mean nearly half of Illinois' 200 hospitals would be operating at a loss, IHA said.
The Medicaid cuts would be in addition to the $8 billion in federal Medicare reductions to Illinois hospitals that began last year under the healthcare reform law and that continue for another nine years, IHA said.
IHA also called on state lawmakers to use revenue projections provided by the nonpartisan Commission on Government Forecasting and Analysis in setting appropriate spending levels for the state budget. The commission this spring issued a state revenue projection of $34.3 billion, more than $1 billion above the estimate now being used by the House.
"Using understated revenue projections will lead to unnecessary and harmful spending cuts that will hurt our state's most vulnerable populations, including the young, the elderly, the disabled, expectant mothers, and the newly employed," Wurth said.
Rather than relying on "blunt cuts," IHA said it has identified more than $100 million in targeted savings, including reductions in preventable readmissions and unnecessary utilization.
IHA also called for the use of interfund transfers that would allow the state to quickly obtain $90 million in new federal Medicaid funds by maximizing the state's temporarily higher matching rate under the economic stimulus law. The House unanimously approved a bill to authorize the transfers, and that bill is now pending in the Senate.
Older, sicker heart-transplant patients are more likely to be alive a year after their operations if they've been treated at hospitals that do a lot of transplants, a Johns Hopkins School of Medicine study showed.
"There's growing evidence throughout medicine and surgery that the volume of cases done at a given medical center has an impact on outcomes," George J. Arnaoutakis, MD, a general surgery resident at the Johns Hopkins University School of Medicine and the study's leader, said in a media release. "Transplant teams more familiar with a procedure do a better job than those that only do a handful each year."
The findings will be presented at the American Association of Thoracic Surgeons' annual meeting in Philadelphia.
The researchers examined United Network of Organ Sharing data from all of the heart transplants done in the United States between January 2000 and December 2009. The researchers assigned each of the 17,211 patients a risk score, which took into account known risk factors for complications and/or death after heart transplant, including age, race, cause of heart failure, bilirubin and creatinine levels and whether they had been on life support. The higher the score, the greater risk of death one year after transplantation, the study said.
Researchers also ranked the 141 hospitals where the transplants took place into low-, medium- and high-volume centers. Low-volume centers did fewer than six heart transplants a year. High-volume centers performed more than 15 annually. Just 5.4% of heart transplants took place at low-volume centers over that 10-year period, while more than 67% were done at high-volume centers, the Johns Hopkins research showed.
High-risk patients transplanted at low-volume centers had a 67% increased risk of death after one year compared with high-risk patients transplanted at high-volume centers. Severity of condition alone did not account for the difference, which diminished among low-risk patients, the research showed.
"Patients at high risk of mortality should probably only be transplanted at high-volume centers," Arnaoutakis said.
Arnaoutakis said the findings aren't an indictment of the training and skill of surgeons at low-volume centers, but more likely reflect the systems and infrastructure of a center doing few heart transplants.
"There are certain processes that may be better performed at regional centers of excellence doing more of a certain procedure," he said. "People talk about it with airline pilots -- only at 10,000 hours of flying are they considered expert at flying. The experience of a center can be discussed in similar terms."
Nurses at a high-volume center, for example, may be quicker to recognize complications and intervene earlier, he said. Operating room teams might be better prepared to handle a transplant that occurs in the middle of the night.
"The more you do it, the better you become at doing it," he said.
