Humana Inc. has announced that it will pay $790 million to buy Addison, TX-based Concentra Inc., a provider of urgent care, physical therapy, and wellness services with 300 facilities in 42 states.
Louisville, KY-based Humana says nearly 3 million of its customers live near a Concentra center, which also operates more than 240 worksite medical clinics.
"Concentra brings solid experience across a number of fronts that fit well with our consumer-focused strategy and will allow both organizations to provide a wide array of services to individuals needing access to convenient and affordable high-quality healthcare," says Michael B. McCallister, Humana's chairman/CEO. "We are excited about the opportunity to acquire a strong stand-alone business that reinforces our core businesses while providing both revenue diversification and opportunities for strategic expansion longer term."
Concentra CEO James. M. Greenwood says the acquisition will provide an opportunity to expand services to patients and employers. "Concentra's focus on evidence-based, cost-effective medical care and a service-driven culture parallels that of Humana and ultimately results in tremendous opportunity across the combined enterprise," Greenwood says.
Concentra generates annual revenues of about $800 million. The transaction is subject to regulatory reviews but is expected to close in December.
Requiring physicians to ask for preauthorization from health insurance companies harms patient care, and creates an expensive and confusing claims process, according to a national survey released by the American Medical Association.
"Intrusive managed care oversight programs that substitute corporate policy for physicians' clinical judgment can delay patient access to medically necessary care," said AMA Immediate Past President J. James Rohack, MD. "According to the AMA survey, 78% of physicians believe insurers use preauthorization requirements for an unreasonable list of tests, procedures and drugs."
The AMA said the national survey—released this week— of approximately 2,400 physicians is an attempt to quantify the burden of preauthorization mandates for a growing list of routine tests, procedures and drugs. Physicians complained that preauthorization delays or interrupts patient care, wastes time, and complicates medical decisions.
The survey found that:
37% of physicians experience a 20% rejection rate from insurers on first-time preauthorization requests for tests and procedures, and 57% experience a 20% rejection rate on first-time preauthorization requests for drugs.
46% of physicians had difficulty getting approval from insurers on 25% or more of preauthorization requests for tests and procedures, and 58% experience difficulty getting approval from insurers on 25% or more of preauthorization requests for drugs.
63% of physicians typically wait several days to receive preauthorization from an insurer for tests and procedures, while 13% wait more than a week. And 69% of physicians typically wait several days to receive preauthorization from an insurer for drugs, while 10% wait more than one week.
64% of physicians have trouble determining which test and procedures require preauthorization, and 67% have trouble determining which drugs require preauthorization.
A Health Affairs study published in 2009 showed that navigating the managed care maze costs physicians $23.2 to $31 billion a year.
AMA said its survey showed that preauthorization policies create costly bureaucratic hassles that take time away from patients. Physicians in the survey said they average 20 hours each week dealing with preauthorizations.
"Nearly all physicians surveyed said that streamlining the preauthorization process is important and 75% believe an automated process would increase efficiency," Rohack said. "The AMA is urging health insurers to automate and streamline the current cumbersome preauthorization process so physicians can manage patient care more efficiently."
The federal government on Monday unveiled a $290 million loan repayment program that could reimburse primary care physicians and dentists up to $60,000 if they agree to practice for two years in medically underserved areas.
Health and Human Services Secretary Kathleen Sebelius announced the launch of the application cycle for the National Health Service Corps Loan Repayment Program, during a visit to Total Health Care, a community health center in Baltimore.
"As we continue to seek ways to impact both the primary care workforce shortage and the increasing debt burden on new providers, NHSC serves as a model for addressing both challenges simultaneously," Sebelius said. "Increasing access to primary care physicians who can support the physical and mental well-being of individuals can help prevent disease and illness, and ensure everyone—regardless of where they live—has access to comprehensive, high quality care."
The Affordable Care Act provides more flexibility in how the Corps administers the loan repayments. In addition to raising monetary awards, the Corps will give members the option of working half-time to fulfill their service obligation and provide credit for some teaching hours, HHS said.
"By the end of FY2011, we expect that over 10,800 clinicians will be caring for more than 11 million people, more than tripling the National Health Service Corps since 2008," says NHSC Director Rebecca Spitzgo. "By 2015, with the historic funding opportunities offered by ARRA and the Affordable Care Act, the Corps will support more than 15,000 new primary care professionals."
Providers can apply to the NHSC loan repayment program online.
New medical loss ratio regulations issued Monday will require health insurers in 2011 to spend between 80% - 85% of consumers' premiums on direct care for patients and care quality improvements, the Department of Health and Human Services has announced.
The new rules will affect about 74.8 million insured Americans. In 2012, up to 9 million Americans could be eligible for rebates totaling up to $1.4 billion -- or $164 per person in the individual coverage market if insurers don't meet the medical loss ratio, HHS said.
HHS Secretary Kathleen Sebelius said the medical loss ratio provision of the Affordable Care Act will make the insurance market more transparent and easier for consumers to purchase plans at a better value. "These new rules are an important step to hold insurance companies accountable and increase value for consumers," she said.
The medical loss ratio regulation outlines disclosure and reporting requirements, how insurance companies will calculate their medical loss ratio and provide rebates, and how adjustments could be made to the medical loss ratio standard to guard against market destabilization.
"These rules were carefully developed through a transparent and fair process with significant input from the public, the states, and other key stakeholders," said Jay Angoff, director of the Office of Consumer Information and Insurance Oversight at HHS. "As we build a bridge to 2014 when better, more affordable options are available to consumers these rules will help make health insurance fairer for consumers now."
The Affordable Care Act required the National Association of Insurance Commissioners to develop uniform definitions and methodologies for calculating insurance companies' medical loss ratios. The regulation issued today certifies and adopts the NAIC recommendations submitted to the Secretary of HHS on Oct. 27.
In a statement released Monday, America's Health Insurance Plans (AHIP) President and CEO Karen Ignagni said, "These regulations acknowledge the potential for individual insurance market disruption and take a first step toward minimizing such disruptions. The potential for disruption to employer-provided coverage should also be acknowledged and addressed. In addition, more consideration needs to be given to the cost of federally mandated investments in modernizing claims coding and the value of health plans' programs to prevent fraud."
Cecil B. Wilson, MD, President of the American Medical Association said in a statement, "We are pleased that HHS did not allow the health insurance industry to claim administrative expenses as medical losses, artificially inflate the medical loss ratio, or calculate their ratios at the national level."
Healthcare reform will dramatically change how physicians conduct business and likely will mean the end of full-time, independent, private practitioners accepting third-party payments, according to a new report.
Instead, the survey and report commissioned by Boston-based The Physicians Foundation predicts that physicians will become employees, part-time workers, administrators, operate cash-only "concierge" practices, or leave medicine altogether.
"The private practice physician is rapidly disappearing," said Lou Goodman, president of nonprofit The Physician Foundation. "Both market forces and the healthcare reform law are forcing physicians to find new ways of running a practice. We are extremely concerned about how this will affect patient care."
The report, Health Reform and the Decline of Physician Private Practice, conducted and compiled by physician recruiters Merritt Hawkins, includes results from a national survey of 2,400 physicians, only 26% of whom said they would continue practicing the way they are in the next one to three years. The remaining 74% said they would retire, work part-time, close their practices to new patients, become employed and/or seek non-clinical jobs.
The survey also found that a majority of physicians did not support health reforms, which they believe will increase patient volume while decreasing revenues.
Based on the discontent made plain in the survey and other data, the report's advisory panel, which included seven physicians, also predicts that:
The federally mandated reforms will have a transformational effect on healthcare delivery, with substantive and lasting change, unlike the "false dawn" of the healthcare reform movement in the 1990s.
Independent, private physician practices will be largely, though not uniformly, replaced.
Most physicians will be forced to consolidate with other practices, become hospital employees, or align with hospitals and health systems for capital, administrative, and technical resources.
Emerging practice models will vary by region, with a proliferation in larger accountable care organizations, private practice medical homes, large independent groups, large aligned groups, community health centers, concierge practices, and small aligned groups.
Reforms will drastically increases compliance obligations and potential liability under federal fraud and abuse statutes. More funding for enforcement, more whistleblowers, and the suspension of the government's need to prove "intent" will exacerbate compliance issues for physicians.
Reforms will worsen physician shortages, and will not address primary care shortages or physician distribution issues.
The demand to care for more patients, with higher quality, less cost, increased reporting and tracking demands, with enhanced liability and reimbursement issues, will put more stress on physicians, particularly those in private practice.
Congress' refusal to provide a permanent fix to the Sustainable Growth Rate formula will be a disincentive for physicians, who will likely limit patient access.
Despite its many problems, healthcare reform was necessary and inevitable and many of the changes mandated by the "formal" reforms likely would have occurred on their own with the "informal" delivery of care, owing to economic and demographic forces.
The Rural Nebraska Healthcare Network, a consortium of nine hospitals and clinics in western Nebraska, has broken ground on a new $18 million fiber optic medical network that—when completed—will extend across the Nebraska panhandle.
The ceremonial groundbreaking last Friday at Regional West Medical Center in Scottsbluff, NE, marks the start of a project made possible by federal funding under the Rural Healthcare Pilot Program of the Federal Communications Commission.
RNHN will connect nine primary care hospitals and dozens of affiliated clinics creating one of the most advanced and robust medical technology networks in Nebraska.
“This fiber network will facilitate the deployment of advanced medical technologies, and vastly improve patient care and physician communication,” said Lisa Bewley, CIO for Regional West Medical Center.
RNHN contracted with Zayo Group, a Colorado-based provider of bandwidth infrastructure and network neutral colocation services, to build the network that will piggyback commercial telecommunications products to be offered in underserved rural Nebraska.
The proposed 750 mile fiber network spans 12 counties in western Nebraska, and will connect to national research networks such as National Lambda Rail and Internet 2 in Denver, CO. Adesta, LLC, a Nebraska company is about to begin the network construction, which has been two years in the planning.
The average, per capita cost of providing healthcare services in the United States rose by 7.08% for the past 12 months ending in September, a rate of growth that has slowed slightly, but which is still well above the 1.1% overall inflation for the same period, according to the latest monthly study by Standard & Poor's.
The new numbers are consistent with a trend that from September 2000 to September 2010 has seen healthcare inflation rise 48% while overall Consumer Price Index has risen 26% for the same period, U.S. Bureau of Labor Statistics data show.
A further breakdown of the data from the S&P Healthcare Economic CompositeIndex show that physician and hospital claims costs associated with commercial plans rose 8.54% for the 12-months ending in September, while similar claims associated with Medicare rose 4.68%, despite Medicare's sicker, older population.
The annual growth rates calculate a percent change of the 12-month moving averages of the monthly index levels when compared with the same month in the previous year.
The trends mark a slight deceleration of growth from the 7.31% reported for the 12 months ending in August, 2010. Physician and hospital claims costs associated with commercial plans and with Medicare rose 8.64% and 5.07%, respectively, in the 12 months ending in August.
"While annual expenditures for Medicare and commercial insurance programs continue to rise faster than either inflation or GDP growth, the pace has slowed slightly in the last seven months" said David M. Blitzer, chairman of the Index Committee at S&P. "In the 12 months ended in September, the composite index rose 7.08% compared to the 12 months ended last February when the increase was 8.39%. Expenditures associated with commercial health insurance plans continue to outpace expenditures for Medicare; the commercial increase over the 12 months to September was 8.54% vs. 4.68% for Medicare."
Blitzer said September's results are consistent with a "moderating trend" in expenditure increases that have been seen in most of the indices in the S&P composite. He said a comparison of the 12 months to September with the 12 months to last February revealed that Medicare and the Hospital Medicare indices showed the most moderation in costs while the Hospital Commercial Index saw a slight increase in the growth of expenditures. "While encouraging, these trends can shift quickly as shown by patterns over recent years. Further, none of these data reflect the healthcare legislation enacted earlier this year," Blitzer said.
A further breakdown of the year-over-year change in the S&P Healthcare Economic Indices for the 12-month period ending September 2010 show that—despite the "moderating trend"—cost increases in healthcare are well above the Consumer Price Index, including: Hospital Index 7.15%; Hospital Medicare Index 3.96%; Hospital Commercial Index 9.62%; Professional Services Index 6.82%; Professional Services Medicare Index 5.42%; and Professional Services Commercial Index 7.42%
With an eye toward expanding its access to independent pharmacies in the northeast, Cardinal Health says it will acquire Kinray, Inc., a pharmaceutical distributor serving the New York City area, in an all-cash deal valued at $1.3 billion.
"Adding Kinray to the Cardinal Health Pharmaceutical Segment portfolio will enable us to build on our increasing presence in community pharmacy and accelerate our growth in this important channel," says George Barrett, chairman/CEO of Cardinal Health. "Kinray has a long-standing service tradition with its customers. We intend to continue that tradition, utilizing its customer expertise and Whitestone (NY) distribution facility, while creating additional value for its customers through branded pharmaceutical programs, inventory and pharmacy management tools and Cardinal Health's extensive generic drug program."
Kinray has annual sales in excess of $3.5 billion and serves more than 2,000 retail independent pharmacy customers as a distributor of branded and generic pharmaceuticals. Kinray primarily serves the New York metropolitan area and will establish a stronger platform for Cardinal Health in the northeast. The addition of Kinray will increase Cardinal Health's retail independent pharmacy base by 40% to about 7,000 customers. The deal is expected to be finalized by the end of the year.
"The combination of Kinray's distribution model with the benefits of the value-added services offered by Cardinal Health will benefit our customers, making them even more efficient and successful in caring for their patients," said Stewart Rahr, president/CEO of Kinray.
One in seven Medicare beneficiaries suffers an adverse event during a hospital stay, and those events, nearly half of them preventable, contributed to at least 15,000 deaths in a single month, a federal study has found.
The adverse events included the National Quality Forum Serious Reportable Events; Medicare hospital-acquired conditions; and events resulting in prolonged hospital stays, permanent harm, life-sustaining intervention, or death.
The incidence rate projects to about 134,000 Medicare beneficiaries—13.5%—experiencing at least one adverse event in hospitals during a single month, with events contributing to the deaths of about 15,000 beneficiaries, according to the audit by the Department of Health and Human Services' Office of Inspector General.
Physician reviewers for OIG determined that 44% of adverse events were preventable, most commonly because of medical errors, substandard care, and inadequate patient monitoring. Additional hospital care necessitated by these events consumed an estimated 3.5% of Medicare's inpatient expenditures for the sample month—about $4.4 billion in Medicare costs annually. Two-thirds of these costs were the result of additional hospital stays, the study found.
OIG recommended that the Agency for Healthcare Research and Quality and Centers for Medicare & Medicaid Services lead national efforts to reduce events, broaden patient safety efforts to include all types of adverse events, and enhance efforts to identify events. OIG wants CMS to provide more incentives for hospitals to reduce adverse events through its payment and oversight functions, including strengthening the Medicare hospital-acquired conditions policy, and holding hospitals accountable for adopting evidence-based practices.
In a letter to HHS Inspector General Daniel R. Levinson, CMS Administrator Donald Berwick, MD, said the report demands that "solutions need to be addressed as quickly and as efficiently as possible." Berwick said CMS has taken action on some of the issues but "more work needs to be done," and that CMS would play a more proactive role in providing "a culture of safety across the country in all healthcare settings."
"While the report characterizes CMS as an oversight entity and the nation's largest health payer, CMS is also actively transitioning from serving solely as a regulator and passive payer of healthcare services to an agency that fully supports public health goals as an active payer of high quality and efficient care," Berwick said.
AHRQ Director Carolyn M. Clancy, MD, told Levinson she agreed with the findings, which she called "consistent with previous studies, but are nonetheless disturbing. They confirm that adverse events continue to affect hospital patients at an alarming rate and that the types of events that occur vary widely."
Clancy said the report "reaffirms AHRQ's need to continue to work on improving patient safety by broadening investigations to include areas that are not always seen on lists of adverse events that should never occur or should always be reported."
Clancy said AHRQ intends to foster continued improvement in both identifying and reducing adverse events through operational programs, research efforts, and further collaboration with other agencies.
The American Hospital Association issued these remarks Tuesday, "While hospitals have made great strides in improving care, this report highlights that there is more we can do. Hospitals are already engaged in important projects designed to improve patient care in many of the areas mentioned in the report. We are committed to taking additional needed steps to improve patient care. That is why we support the report's recommendations for further research to improve our understanding of what caused the error and how to prevent it from happening again.
The OIG report is based on a national sample of 780 Medicare beneficiaries discharged from acute care hospitals in October 2008. Physician reviewers used medical records to identify adverse events and assess whether each event was preventable. OIG used Medicare claims data to estimate Medicare costs.
HCA and Tampa-based USF Health announced they are forming a statewide trauma network to improve trauma care and centralize research in Florida.
About 38% of trauma patients in Florida receive treatment in a designated trauma center, below both the national average and the state’s goal to have 65% of trauma patients treated in a Florida licensed trauma center, HCA and USF Health said in a joint announcement.
“Getting a patient to a trauma center within the first hour of injury, or golden hour, drastically increases their chance of survival,” says Jonathan Perlin, MD, president of clinical services and CMO for HCA. “Research supported by the Centers for Disease Control shows trauma mortality is reduced when a seriously injured patient is treated at a trauma center versus a non-trauma hospital.”
In Florida, the leading cause of trauma injury is motor vehicle crashes, accounting for 43% of all injuries in 2008. Motor vehicle injury fatalities are strongly associated with the distance from a trauma center to the accident scene, according to the study A Comprehensive Assessment of the Florida Trauma Center, conducted by USF and UF for the Florida Department of Health. The study also notes that counties without trauma centers have higher mortality rates.
“It is absolutely critical that we expand access to trauma care to state-designated trauma service areas not currently being served,” Perlin says. “Trauma centers deliver superior outcomes for their patients and we are excited to have USF join us as we work to improve the access to quality trauma care in Florida.”
Five HCA hospitals across Florida and the University of South Florida College of Medicine will affiliate to create the Florida Trauma Research and Analysis Center, TRAC, a centralized statewide data collection for trauma research and coordination of services. TRAC’s focus on quality patient care and research will improve trauma care in the state, said Stephen Klasko, MD, dean of the USF College of Medicine and CEO of USF Health.
“Our goal is to have Florida be the safest state in the nation,” Klasko says. “This network will provide the state’s trauma patients with consistent and state-of-the-art care.”
David J. Smith Jr., MD, chair of the USF Department of Surgery, says TRAC data from five hospitals will identify trends that might not be noticed at one hospital. “Florida TRAC will help doctors learn how to better treat trauma patients, whether they are injured in car crashes or suffering from heart attacks,” Smith says.
USF will name a chief trauma medical director to oversee the network and appoint a medical director of trauma at each hospital, as well as helping to recruit needed specialists.
The five HCA hospitals are:
Blake Medical Center, in Manatee County;
Kendall Regional Medical Center, in Miami-Dade County;
Lawnwood Medical Center, in St Lucie County;
Orange Park Medical Center, in Clay County;
Regional Medical Center Bayonet Point, in Pasco County.
All of the hospitals have applied for Level II Trauma Center designation. Lawnwood is approved and operating, and the other four hospitals are in the application process.
