The pacing, the toe tapping, and the finger drumming ended last week for an anxious and expectant healthcare industry when the federal government – two months overdue – finally delivered its much anticipated 429-page proposed guidelines for accountable care organizations.
And even though the ACO program is voluntary and will be limited to only about five million Medicare beneficiaries when it opens on Jan. 1, 2012, there remains a sense among supporters and detractors that there is no going back – that no matter what happens during the ensuing public comment period, the healthcare world has changed forever.
When the proposed guidelines were released last Thursday, Health and Human Services Secretary Kathleen Sebelius boldly stated that ACOs will put patients and their doctors “in control” of their own healthcare. “For too long, it has been too difficult for healthcare providers to work together to coordinate and improve the care their patients receive,” Sebelius said, in the HHS media presentation. “That has real consequences: patients have gaps in their care, receive duplicative care, or are at increased risk of suffering from medical mistakes. Accountable care organizations will improve coordination and communication among doctors and hospitals, improve the quality of the care their patients receive, and help lower costs.”
The major healthcare lobbying groups offered noncommittal – and possibly prefabricated – immediate reactions to the guidelines – saying just enough to appease befuddled journalists asking fuzzy questions about a concept that many clearly do not yet understand, and careful enough to avoid aggravating the federal policyholders they’ll attempt to sway during the coming public comment period, but also reasserting their longstanding concerns about the impact of ACOs on their corner of the healthcare market.
“This is an historic effort among government agencies to achieve the goal of better coordinated care," said Linda Fishman, senior vice president for Policy at the American Hospital Association, in a statement issued soon after the guidelines were made public. “However, it does not go nearly far enough to eliminate the barriers to clinical integration among caregivers.”
From the payer perspective, America’s Health Insurance Plans President and CEO Karen Ignagni also expressed concerns about antitrust provisions needed to protect insurers from “the trend of provider consolidation that drives up medical prices and result in additional cost-shifting to families and employers with private coverage.”
As for providers, before they can begin to create ACOs, they have to realize who such entities are accountable to. "The accountability is not unilateral; it's trilateral, for the management of care across locations and time," Tom Enders, managing director of CSC's Health Sector Group in New York told HealthLeaders Media last fall. Then they must decide whether the potential cost savings worth the effort to establish an ACO.
Among the potential pitfalls recognized by the federal government are the legitimate antitrust concerns from payers and providers. So the feds piggybacked onto the ACO guidelines a separate proposal calling for expedited antitrust reviews and designated antitrust "safety zones" for some ACOs. “The Administration has led an unprecedented, collaborative effort among all of the agencies responsible for developing guidance for ACOs," said Federal Trade Commission Chairman Jon Leibowitz. "This guidance will help ensure that ACOs meet their goals of improving quality and lowering costs while minimizing the regulatory burden on healthcare providers."
Paul Keckley, executive director of the Deloitte Center for Health Solutions, said he was impressed by the federal government’s “deliberate process” of crafting guidelines for an extremely complex proposal that has the potential to revolutionize healthcare delivery and outcomes. “The amount of effort they built into calibrating the quality metrics, the indices of the five domains, the waivers, the safety zones, the antitrust issues. They were pretty thoughtful about balancing all of those moving parts of what is a pretty complicated concept," he told HealthLeaders Media.
"I read carefully the discussion of antitrust safety zones, how primary service areas are defined, the 30% threshold," he said. "The language in the guidance suggests that they have been very thoughtful about waivers and antitrust. And, they have maybe been cautious thinking about what will happen if commercial health plans piggyback the ACOs and use them as their contracting organizations. Does that consolidate power? Does it create cartels? I was impressed by the granularity of the language in that section."
Keckley said the overarching theme from the government is the emphasis on physician-hospital alignment. “You have value-based purchasing, and episode-based payments and avoidable readmissions, and the medical home, the ACO, physician quality reporting initiative and the physician self-referral language and you step back and see they are compelled by the vision of integrated systems," he says. "That to me is the big cake here."
And, like any sweeping government program, ACOs come with their own language. Soon, healthcare wonks and consultants who last week couldn’t tell a “Safety Zone” from a “Primary Service Area” will be tossing out eye-crossers like “Precompetitive,” “Retrospective Assignment,” “Dominant Provider Limitation,” and “Group Practice Reporting Option” (which will undoubtedly morph into the catchy GPRO) in dozens of forums, webcasts, seminars, and retreats from coast to coast. That’s the first thing you do when you’re in a new culture -- you learn the language.
One thing is clear—technology will play a huge role. "Clearly, health IT is the backbone, the enabler to an ACO," says Warren Skea, PhD, director, health industries advisory practice at PricewaterhouseCoopers, which sponsored HealthLeaders Media's Breakthrough's report, The Bridge to Accountable Care Organizations.
Nashville Based AmSurg Corp. announced Thursday afternoon that it would buy National Surgical Care in a $173.5 million cash deal.
NSC, based in Dallas, owns 18 ambulatory surgery centers in nine states, including 16 multi-specialty centers and two centers that specialize in gastroenterology procedures, which combined performed more 100,000 cases in 2010.
AmSurg President/CEO Christopher Holden said in a media release that the acquisition would "complement and expand our existing footprint."
"Through this transaction, we will increase our multi-specialty ASCs to a total of 43, based on year-end 2010 numbers, making AmSurg's network of majority-owned multi-specialty centers one of the largest among ASC companies in the country, in addition to our leading positions in the single surgical specialty markets for GI ASCs and ophthalmology ASCs," Holden said. "This strategic acquisition diversifies our portfolio and advances our vision of becoming a global leader in ambulatory healthcare services."
NSC's consolidated revenues in 2010 were $124.5 million and its adjusted EBITDA was $21.5 million. AmSurg will fund the transaction with cash and loans and has exercised the accordion feature on its revolving credit facility, allowing it to borrow up to $450 million from $375 million previously. Pending regulatory approval, the deal is expected to be finalized by the end of June, AmSurg said.
Sami S. Abbasi, chairman/CEO of NSC, said in the joint media release that the two healthcare companies share a "physician-centric culture and commitment to excellence."
"Our mission has always been to be the surgical provider of choice in our communities, with a culture that attracts the best possible people and that promotes learning, continuous improvement and growth," Abbasi said. "We are confident that our agreement to join AmSurg represents the right opportunity to carry this mission forward successfully."
Holden said AmSurg would continue with its ongoing plan to add 18 to 20 new centers in addition to those acquired in the NSC deal.
Wright Memorial Hospital in Trenton, MO said it will open a 25-bed hospital next week.
The $30 million facility includes a 60,000 square foot hospital and adjoining 12,000 square foot medical office building. Hospital services will include digital mammography, a 64-slice CT scanner, two surgical suites and a 24/7 physician-staffed emergency department with trauma bay and private ambulance entrance, Wright Memorial said in a media release.
The hospital, part of the not-for-profit 11-hospital Saint Luke's Health System, also features patient-centered amenities, including two labor and delivery suites with private bathrooms and a secure nursery area. Private inpatient rooms are equipped with wireless internet, flat screen televisions and handicap accessible bathrooms with walk-in showers.
This fall, Wright Memorial will link into an electronic ICU that will allow patients to be cared for both by on-site staff and by an off-site patient monitoring system that observes patients in ICUs across Saint Luke's Health System. The eICU team has immediate access to patients' computerized records, from medications and vital signs to test results and X-rays, along with automated warning and decision–support software.
In addition, a complete electronic medical records system will be in place by 2012, Wright Memorial said.
"Planning for the new facility began more than five years ago. The long-anticipated opening of the hospital and medical office building is the culmination of a vision to enhance healthcare services for citizens of Trenton and the surrounding area," said Don Sipes, vice president for Regional Services at Saint Luke's Health System.
More than 350 hospitals in 22 states in a national pilot project to tackle central line-associated bloodstream infections in their adult intensive care units are reporting CLABSI reductions of 35%, according to the Agency for Healthcare Research and Quality.
An interim report issued Tuesday by AHRQ, On the CUSP: Stop BSI, found that CLABSI rates dropped from an average of 1.8 infections per 1,000 central line days to an average of 1.17 infections per 1,000 central line days in ICUs that participated in the project.
The project is led by the Health Research & Educational Trust, an affiliate of the American Hospital Association. "AHRQ's vision of spreading a proven method of reducing these infections to all states has demonstrated its innovative leadership in patient safety, and HRET is proud to be part of this groundbreaking work along with Johns Hopkins and the MHA Keystone Center," said John R. Combes, MD, AHA senior vice-president and senior fellow at HRET, in a statement.
About 1,100 hospitals in 45 states, the District of Columbia, and Puerto Rico have enrolled in the national effort, which is based on a Michigan Health & Hospital Association Keystone Center project that dramatically reduced CLABSI rates in Michigan hospitals.
The On the CUSP: Stop BSI initiative, is scheduled to continue through 2012. Participating hospitals are given training developed by Peter Pronovost, MD, at Johns Hopkins University Quality and Safety Research Group. Participating hospitals also receive data reports and implementation guidance from the MHA Keystone Center and collaborate with other participating hospitals in their state.
HealthSouth Corp. said it has received permission from the state of Florida to build a $21 million, 40-bed hospital in Ocala that will specialize in physical rehabilitation for patients with trauma, brain and orthopedic injuries, strokes, and other major illness or injuries.
"This state-of-the-art hospital will provide a new and different type of service which will further augment the already strong continuum of healthcare services provided in Ocala/Marion County," Linda Wilder, president of HealthSouth's Southeast region, said in a media release. "We look forward to working with other providers in the community to integrate this new service in Marion County."
Construction on the 49,000-square foot Ocala Rehabilitation Hospital of Marion County, LLC is expected to begin by the end of 2011. Once it is operational, the hospital will create around 112 new, full-time jobs.
With 81,000 residents over the age of 65, Marion County is the largest county in Florida that doesn't have access to inpatient rehabilitation—a number that is expected to grow at a rate of 18%, faster than any other county in Florida, Wilder said.
"Currently, Marion County residents have very limited access to an inpatient rehabilitation hospital requiring patients and their families to travel to Gainesville or Spring Hill. This new hospital will ensure that residents have appropriate and reasonable access to the latest rehabilitative treatment and technology in a hospital setting," Wilder said.
Birmingham, AL-based HealthSouth is the nation's largest provider of inpatient rehabilitative healthcare services, with operations in 26 states, including nine inpatient rehabilitation hospitals and one long-term acute care hospital in Florida.
Rex Healthcare in Raleigh, NC has been ordered to pay the federal government $1.9 million, plus interest, to settle whistleblower allegations that its flagship hospital submitted false claims to Medicare to get pricier inpatient reimbursements for kyphoplasties and other minimally invasive procedures, the Justice Department announced this week.
The allegations arose from a whistleblower lawsuit filed in 2008 in federal court in Buffalo, NY, by Craig Patrick and Charles Bates, former employees of the medical device company Kyphon. The two men will receive a total of $80,000 of the settlement proceeds for kyphoplasty-related claims, DOJ said.
"We pursue cases like this because when hospitals submit false claims in order to increase their Medicare reimbursement, as we allege here, it artificially drives up the cost of healthcare, leaving taxpayers to foot the inflated bill," Tony West, Assistant Attorney General for the Justice Department's Civil Division, said in a media release announcing the settlement.
Rex Hospital is the second North Carolina hospital to settle Medicare fraud charges involving kyphoplasties. Presbyterian Orthopaedic Hospital in Charlotte paid the federal government more than $637,000 in December to settle fraud charges.
In May, 2008, Medtronic Spine LLC, the corporate successor to Kyphon Inc., agreed to pay the federal government $75 million to settle Medicare settle false claims allegations that it advised hospitals on how to improperly bill for the procedures. Since then, 26 hospitals have negotiated kyphoplasty settlements with DOJ.
The alleged improper billing at Rex Hospital took place from 2004 through 2007, DOJ said.
Federal prosecutors have used the False Claims Act to recover $5.3 billion since January 2009 in cases involving fraud against federal healthcare programs. DOJ's total recoveries in False Claims Act cases since January 2009 have topped $6.8 billion.
Linda Butler, MD, CMO of Rex Healthcare said in a phone interview with HealthLeaders Media:
"We don't feel like we did anything wrong. We were following rules at the time but it was probably easier and cheaper to settle than to fight the government on this. We were performing this procedure on elderly frail patients in their 70s and 80s who were in excruciating back pain and they had a lot of problems like cancer and cardiac issues. Some even spent the night in the ICU due to their frail state. During that time we were following the InterQual third-party billing recommendations to bill this as an inpatient procedure. In 2007 when it was deemed to be an outpatient procedure we began billing it as outpatient. When the government decided to retroactively penalize people who had billed it as inpatient before 2007 we were caught with that. We didn't think we did anything wrong. We think it is unfair, but it was probably better to settle."
Educating and training healthcare personnel and maintaining safety protocols are the key areas of emphasis in updated federal guidelines designed to prevent catheter-related bloodstream infections.
"Catheter-related bloodstream infections—like many infections in healthcare—are now seen as largely preventable," said Naomi O'Grady, MD, medical director of procedures, vascular access, and conscious sedation services at the National Institutes of Health Clinical Center Critical Care Medicine Department, and lead author of the study: Guidelines for the Prevention of Intravascular Catheter-Related Infections, 2011.
"Implementation of these critical infection control guidelines is an important benchmark of healthcare quality and patient safety," O'Grady said in a media release.
The guidelines were created by NIH, the Centers for Disease Control and Prevention, and the Healthcare Infection Control Practices Advisory Committee, in consultation with 14 other healthcare professional organizations.
In addition to training for healthcare personnel and fortifying sterile barriers during catheter insertion, the guidelines also call for: using 'maximal sterile barrier precautions' during central venous catheter insertion; cleaning skin with the antibacterial scrub chlorhexidine: using a > 0.5% chlorhexidine skin preparation with alcohol for antisepsis; avoiding routine replacement of central venous catheters as a strategy to prevent infection; and using antiseptic/antibiotic impregnated short-term central venous catheters and chlorhexidine impregnated sponge dressings if the rate of infection is not decreasing using the first four strategies fail, the guidelines said.
The guidelines, which replace the 2002 edition, also recommend using "bundled strategies" and documenting and reporting rates of compliance with all components of the bundle as benchmarks for quality assurance and performance improvement. The report was published Friday in Clinical Infectious Diseases, and is available on CDC's HICPAC website. The guidelines will also be included in a special supplement to the American Journal of Infection Control.
The Department of Health and Human Services has prioritized tracking, reporting, and preventing costly and dangerous bloodstream infections, with a national goal of reducing central line-associated bloodstream infections by 50% by 2013.
Starting this year, hospitals must track and report CLABSIs in ICUs to qualify for an annual 2% Medicare payment increase. Hospitals will report their infection rates to CDC's National Healthcare Safety Network, and the data will be shared with the Centers for Medicare & Medicaid Services, and made public later this year on CMS' Hospital Compare Web site. CDC and the Agency for Healthcare Research and Quality are also providing state health departments with funding to better track and prevent HAI's at the state level, CDC said.
A recent CDC report showed a 58% decrease in CLABSIs among hospital ICU patients in 2009, compared to 2001. In 2009 alone, reducing these infections saved about 3,000 to 6,000 lives and about $414 million in extra medical costs, compared with 2001.
"Education and reinforcement of care and maintenance protocols among staff is key. We all have a role to play in protecting patients from these infections," O'Grady said.
For at least one analyst, there are plenty of details but not too many surprises in the sweeping 429- page proposed guidelines the Centers for Medicare & Medicaid Services issued last week on accountable care organizations.
"The deliberate process they took to issue this two months after we expected it shows they were being very cautious," said Paul Keckley, executive director of the Deloitte Center for Health Solutions, in an interview with HealthLeaders Media.
"They were very deliberate in the language. I've read it twice. The amount of effort they built into calibrating the quality metrics, the indices of the five domains, the waivers, the safety zones, the antitrust issues. They were pretty thoughtful about balancing all of those moving parts of what is a pretty complicated concept," he says.
Keckley said that anyone who's been following the ACO movement wouldn't be surprised to note that the overarching concern in the guidelines is physician-hospital alignment.
"You have value-based purchasing, and episode-based payments and avoidable readmissions, and the medical home, the ACO, physician quality reporting initiative and the physician self-referral language and you step back and see they are compelled by the vision of integrated systems," he says. "That to me is the big cake here."
Healthcare industry groups have offered guarded support for ACOs, but are still sifting through the details. America's Health Insurance Plans, for example, has raised concerns that hospitals and ACO collaborations could forge monopolies for their service areas and dictate higher prices.
Keckley says the proposed guidelines attempt to deal with the "unforeseen."
"I read carefully the discussion of antitrust safety zones, how primary service areas are defined, the 30% threshold," he says. "The language in the guidance suggests that they have been very thoughtful about waivers and antitrust. And, they have maybe been cautious thinking about what will happen if commercial health plans piggyback the ACOs and use them as their contracting organizations. Does that consolidate power? Does it create cartels? I was impressed by the granularity of the language in that section."
The American Hospital Association has raised concerns that the guidelines might not adequately address clinical barriers among caregivers. Keckley says that by identifying the 65 measures in five quality areas – including patient safety, patient experience, care coordination, preventive care, and at-risk populations – the feds "are going as about as far as they can."
"Clinical integration is really a loaded term because it means the doctors and hospitals have to work together and that is not easy," he says. "So, it's one thing to get the evidence and build the evidence-based guideline algorithms. It's another thing to get everybody in one room and say 'we all agree.' I don't think that is a shortcoming of the guidance as much as it is the history of our industry. It's tough for organizations to work together."
The American Medical Association raised concerns that the capital requirements for ACOs might be too highfor many physicians. "It's a fair concern anytime you inject a change into the system as to the cost of implementing something new and where is that cost borne," Keckley said. "I read explicitly that CMS is asking for guidance around several areas. This is one of four identified as an area looking for input."
Keckley says he expects CMS will tinker with the guidelines, but he's not sure what sorts of changes might occur before the Jan. 1, 2012 implement date. "I can't imagine they will alter quality reporting. In year one its pay for reporting, not pay for performance per se. The model for the shared savings and risk, that threshold in the one-sided model that seems to be a range, they will have to be a little more explicit there," he said. "But this is A not much of a surprise to most of the folks who've been watching, so I don't think the January 1 deadlines impose major constraints unless you've convinced yourself we aren't going down the ACO path."
It's important to remember, Keckley points out, that the program is voluntary.
"I don't think that means you're not going down the physician-hospital integration path. It means you may not apply to be an ACO," he says. "If you chose that route, no harm no foul. Folks will chose other routes to physician-hospital alignment. And if you're choosing to go the ACO route this answered a lot of questions."
There are two kinds of surveys: Those that surprise you and tell you what you didn't know, and those that reaffirm what you already knew. Both have their value.
A survey of healthcare workers by Chicago-based recruiters CareerBuilder definitely falls into the second category and confirms what we already know. Namely, that healthcare workers –- like everyone else –- expect to earn a decent living for their labor. Salary and benefits are not, however, what attracted them to healthcare as a career choice, and they're not what make them happy. Remember that in this era of chronic staff shortages and turnover, and aggressive organized labor campaigns.
"Although salary and benefits are important, lower-cost factors, such as mentoring, career-path planning, training and support also greatly influence healthcare employees to apply to and stay at a job," Sanja Licina, senior director of Talent Intelligence at CareerBuilder, said in media release announcing the survey. "With healthcare organizations battling for top talent and facing high demand for positions, it's important for employers to take the temperature of their staff to best meet their needs, as well as keep a finger on the pulse of job seekers."
The survey -- Health Care Workers Reveal Workplace Challenges and Factors That Influence Turnover –- of 1,104 healthcare workers and 310 healthcare employers involved in hiring decisions was compiled between May 1 and June 30, 2010.
Here are some of its key findings:
Of healthcare workers who responded 51% said that a lack of advancement opportunities was the top challenge they faced, and 40% cited work overload as their biggest challenge.
Nurses are more concerned with a good environment than with the amount of money they make. Nurses, the hardest providers to recruit and retain, ranked salary fifth (35%) on their list of biggest workplace challenges. Topping their list was insufficient staff (49%) and a lack of advancement opportunities (49%).
Tenure rates for nurses are low across different healthcare organizations. Analysis of CareerBuilder databases revealed that registered nurses have a median tenure of 1.4 years. Physicians' offices see the lowest nurse turnover, with median job tenure of 1.57 years, while nursing care facilities have the highest at .97 years. Falling in the middle were kidney dialysis centers (1.23) and home healthcare services (1.17).
A wide disconnect exists between benefits offered by employers and what employees say their organizations provide. Fifty-seven percent of respondents said that in-house skills trainings were offered by their employer, however, 68% of healthcare employers said they provided the perk. Licina said this disconnect shows that while healthcare organizations may be offering valuable perks, they are not communicated effectively to employees.
Patient-to-staff ratios are strained, leaving workers spread thin with little time for career development. Fifty-seven percent of healthcare workers said that patient-to-staff ratio is worsening, allowing less time for professional development and career advancement and requiring more time on day-to-day duties.
Outside of a few specifics, such as the alarmingly short length of nurse tenure, there is nothing in the survey that leaps out as a surprise. Spend a few minutes talking to nurses and they'll say as much.
Still, it's troubling to see that even as healthcare workers offer specific, actionable workplace grievances, management either isn't acting on the complaints, or isn't communicating how it is addressing the complaints.
In some ways, these survey results are good news for cash-strapped hospitals. Healthcare workers say quite clearly that it isn't just about money. That's believable. They put patient care and workplace conditions and professional development above compensation. There aren't too many industries that can make that boast about their workforce.
What the survey is really saying is that healthcare workers are not apathetic. They want to do a good job, and they're probably willing to buy into your mission, if you pay attention to their fairly reasonable concerns.
Job growth in the healthcare sector is on an uptick, Bureau of Labor Statistics data and preliminary data show.
Hospitals created 10,200 new jobs in March and 19,600 new jobs in the first quarter of 2011, easily outstripping the 3,700 hospital jobs created in the first quarter of 2010, according to the BLS.
The healthcare sector – everything from hospitals to podiatrists' offices to kidney dialysis centers – created 36,600 new jobs in March, and 82,600 new jobs in the first quarter, and now employs slightly more than 14 million people. Healthcare created 63,200 new jobs in the first quarter of 2010, BLS preliminary data show.
Healthcare sector employment nudged over the 14 million jobs threshold in March for the first time, with 4.7 million jobs at hospitals, nearly 6.1 million jobs in ambulatory services, more than 2.3 million in physicians' offices, and nearly 3.2 million jobs at nursing homes and residential care facilities, BLS preliminary data show.
Ambulatory services accounted for half of the new jobs created in the healthcare sector, with 17,500 new jobs in March, and 45,600 new jobs for the quarter. Ambulatory services created 50,000 new jobs in the first quarter of 2010, BLS preliminary data show.
Physicians' offices reported 7,600 new jobs in March, and 16,500 new jobs in the first quarter, compared with 4,900 jobs in the first quarter of 2010. Nursing and residential care facilities also showed strong job growth in March, creating 8,800 payroll additions for the month, and 17,400 payroll additions in the first quarter, BLS preliminary data show.
BLS data from February and March is preliminary and may be considerably revised in the coming months.
The healthcare sector continues to be one of the few areas of job growth in the sputtering economy. Since the start of the recession in December 2007, healthcare employment has grown by 902,000 jobs, while total nonfarm employment has fallen by 7.2 million, BLS data show.
The larger U.S. economy gained 216,000 jobs in March but the nation's jobless rate was little changed at 8.8% for the month, with 13.5 million people unemployed. The number of long-term unemployed -- people jobless for 27 weeks or longer – was 6.1 million, an increase over the 6 million long-term unemployed reported in February, as their ranks increased from 43.9% to 45.5% of the unemployed, BLS preliminary data show.
