A study compared administrative costs for healthcare in Canada and the United States and found a spending gap that is 'large and widening.'
America's Health Insurance Plans is taking issue with a study this week that blames the bloated administrative costs of healthcare on "the inefficiencies of the U.S. private insurance-based, multipayer system."
The study, published Monday inAnnals of Internal Medicine, compared administrative costs among payers and providers for healthcare in Canada and the United States and found a spending gap that is "large and widening."
In 2017, U.S. insurers and providers spent $812 billion on administration, amounting to $2497 per capita, which represents 34.2% of national health expenditures. Canada, which has a single-payer health system, spent $551 per capita, representing 17% of national health expenditures.
A further breakdown showed that U.S. payers spent $844 on overhead, versus $146 for Canada; $933 for hospital administration, versus $196 in Canada; $255 versus $123 for nursing home, home care, and hospice administration; and $465 versus $87 for physicians' insurance-related costs.
Of the 3.2–percentage point increase in administration's share of U.S. health expenditures since 1999, 2.4 percentage points was due to growth in private insurers' overhead, mostly because of high overhead in their Medicare and Medicaid managed-care plans, the study found.
"The prices that U.S. medical providers charge incorporate a hidden surcharge to cover their costly administrative burden," the study authors said.
By midday Monday, AHIP issued a statement to "provide some important context to this report," and noted that more than 80% of premium dollars goes toward the costs of care.
"Study after study continues to demonstrate the value of innovative solutions brought by the free market. In head-to-head comparisons, the free market continues to be more efficient that government-run systems," AHIP said.
They cited a MedPAC report which showed that Medicare Advantage plans deliver benefits at 88% of the cost of traditional Medicare, including administrative costs.
AHIP also cited a Center for American Progress study which found that "the lowest possible level of administrative spending for the U.S. health care system is not necessarily the optimal level of spending." That's because innovations such as bundled payments require significant upfront investment to develop.
AHIP also cited an article in JAMA which estimated that 25% of waste in the healthcare system could be reduced through investments in interventions that are considered part of administrative costs, such as addressing fraud and abuse and improving patient safety.
A whistleblower suit alleges that Community rewarded physician referrals with compensation way above fair market value.
The Department of Justice has joined a whistleblower lawsuit leveling False Claims Act allegations against Community Health Network, Inc., accusing the Indianapolis-based health system of violating the Stark Law prohibitions against improper financial relationships with physician.
The DOJ alleges that Community employed physicians under terms that did not meet any Stark Law exception because the compensation was well above fair market value, and because Community paid bonuses to physicians who achieved a minimum target of referral revenues back to the hospital.
The complaint also alleges that Community received referrals from these physicians in violation of the Stark Law and submitted claims to Medicare knowing that the claims for those referred services were not eligible for payment.
"Improper financial relationships between hospitals and physicians corrupt clinical decision-making, threaten patient care, and ultimately drive up Medicare costs," Assistant Attorney General Jody Hunt of DOJ's Civil Division said in a media release.
Community issued a lengthy statement saying it is "committed to upholding the highest regulatory and ethical standards in all our business practices, including physician compensation."
"We have cooperated fully with the government's requests leading up to this point, and we are disappointed with their decision. We believe that it is a waste of the government's time and resources to pursue these meritless claims," the system said.
"This lawsuit involves certain administrative issues that are completely unrelated to patient care. We are confident that we have complied with the laws and regulations that govern the way we operate our health network. We are committed to fighting these allegations which have no merit."
"We are confident that we have complied with the law and regulations that govern the way we pay our physicians for the services they provide to our patients and to the communities we serve – services such as teaching, research, providing education to patients and developing protocols to enhance care delivery."
"Community recognizes that physician compensation is very complex and highly regulated. Our physician compensation practices are a key part of our overall compliance efforts. We are confident that we operate in a legally compliant manner. To ensure compliance, as is standard in the industry, Community uses a variety of resources including independent, third parties to evaluate physician compensation to ensure it is fair, as the law requires."
Defenders of the ACA say the stakes are too high to allow the suit to ping-pong between the district and appeals courts.
A coalition of attorneys general defending the Affordable Care Act have asked the U.S. Supreme Court for an expedited review of the Fifth Circuit Court's ruling last month that sent Texas v. U.S. back to the trial judge.
"We're asking the Supreme Court to swiftly resolve this repeal lawsuit for the sake of saving lives and ending uncertainty in our healthcare system," California Attorney General Xavier Becerra said in a media release.
In a 2–1 decision December 18, the Fifth Circuit Court of Appeals agreed with the trial court that the ACA's individual mandate is unconstitutional, but it sent the rest of the expansive law back to the U.S. District Court for the Northern District of Texas for a more detailed analysis of which ACA provisions, if any, should be severed from the mandate and upheld.
Rather than cueing up an expected showdown before the Supreme Court, the appellate decision calls for another round of complex litigation that could again be appealed to the Fifth Circuit.
Led by California, the coalition of 20 states and the District of Columbia have said the stakes are too high to allow the case to ping pong between the district and appeals courts. On Friday they filed the petition asking SCOTUS to take the case before the end of the court's current term in June.
"This ruling jeopardizes the health care coverage of millions of Americans who depend on the Affordable Care Act," said Massachusetts AG Maura Healey. "We are asking the Supreme Court to review the Fifth Circuit's decision and quickly resolve the uncertainty it has caused for our families and our health care system."
Texas Attorney General Ken Paxton called an expedited review by the Supreme Court "premature."
"The Fifth Circuit agreed with our commonsense argument that the individual mandate is unconstitutional," Paxton said. "It remanded the case to the district court to determine whether any portion of Obamacare remains valid in light of the unconstitutionality of the mandate at the heart of the law."
"The Fifth Circuit has ordered the case back to district court, so that's where we're headed. We intend to demonstrate in district court that Obamacare is invalid in its entirety," he said.
A review of compensation for 2,845 Mayo physicians — including 861 women — affirmed pay equity in 96% of the cases.
Mayo Clinic's structured, salary-only compensation model appears to have successfully tackled the nettlesome issue of gender pay disparity, a review shows.
A review of the compensation model — which relies on national benchmarks, standardized pay steps, and increments — for 2,845 Mayo physicians — including 861 women — affirmed pay equity in 96% of the cases, according to the analysis, which was published inMayo Clinic Proceedings.
"Our analysis is unique and to our knowledge the first to demonstrate that a structured compensation model achieved equitable physician compensation by gender, race and ethnicity, while also meeting the practice, education and research goals of a large academic medical center such as Mayo Clinic," study first author Sharonne Hayes, MD, a Mayo Clinic cardiologist said in amedia release.
"The analysis of this long-standing salary-only model was reassuring, not only that it was equitable, but that we as an organization adhere to our own standards," she said.
Gender pay disparity has long been a problem for physicians, and in some specialties it may be getting worse.
In July, the Medscape Female Compensation Report 2019 found that more than 7,000 female primary care physicians reported an average annual salary of $207,000, compared to the average $258,000 compensation for men; a 25% pay gap that widened from 18% in the 2018 survey, with women earning $203,000 compared to $239,000 for men.
The gender pay gap for specialists narrowed from 36% in 2018 to 33% in 2019, with the average male specialist earning $372,000 and the average female specialist earning $280,000.
The researchers reviewed all permanent staff physicians employed at Mayo Clinic in Arizona, Florida and Minnesota in clinical roles as of January 2017; examining each physician's pay, demographics, specialty, full-time equivalent status, benchmark pay, leadership roles and other factors.
The few physicians whose salaries were not in the predicted range were re-examined and shown to have the appropriate compensation, most often due to unique or blended departmental appointments, the researcher said.
"Of the 80 physicians — 2.8% of the total — with higher compensation than predicted by the model, there was no correlation with gender, race or ethnicity. The same was true of the 35 physicians — 1.2% — who had lower-than-predicted compensation," the researchers said.
Mayo adopted a structured compensation model more than 40 years ago, primarily to remove financial incentives for physicians to do more than is medically necessary. The model provides no incentives or bonus pay, and non-salary compensation and benefits are consistent across Mayo Clinic venues and specialties.
More men than women held compensated leadership positions or had past leadership roles — 31.4% of men were in that category, compared with 15.9% of women — and more men than women were in the highest compensated specialties.
Mayo Clinic CEO Gianrico Farrugia, MD, the study's co-author, said achieving "absolute gender pay equity will only be realized when women achieve parity in the most highly compensated specialties and leadership roles."
The rule would require insurers to disclose negotiated rates for in-network providers and allowed amounts paid for out-of-network providers.
The federal government has extended by two weeks the comment period for aproposed rule mandating price transparencyfrom health insurers on out-of-pocket costs for consumers.
The Centers for Medicare & Medicaid Services said in a media release that the 15-day extension that ends on January 29 was needed to account for robust public feedback and the consideration of the holiday season.
If finalized, the proposed Transparency in Coverage Rule would mandate that consumers have real-time access to cost-sharing information, including out-of-pocket expenses, through a user-friendly online tool that most group health plans and health insurance issuers would be required to have.
The rule would also require insurers to disclose on their websites their negotiated rates for in-network providers and allowed amounts paid for out-of-network providers.
The rule goes into effect in 2021.
"Making this information available to the public is intended to drive innovation, support informed, price-conscious decision-making, and promote competition in the healthcare industry," CMS said of the proposed rules.
The proposed rule on health plan transparency was unveiled on November 15, as one of two rules mandating price transparency from hospitals and insurers. Both proposals were met with a chorus of boos from payers and providers.
Matt Eyles, president and CEO of America's Health Insurance Plans, said in November that price transparency "should aid and support patient decision-making, should not undermine competitive negotiations that lower patients' health care costs, and should put downward pressure on premiums for consumers and employers."
"Neither of these rules—together or separately—satisfies these principles," he said.
Anticipating the blowback, President Donald Trump on November 15 joked that insurers would be "thrilled" by the mandate.
"This will allow you to see your out-of-pocket costs and other vital price information before you go in for treatment, so you're going to know what it's going to be and you're going to be able to have lots of choices, both in terms of doctors, hospitals, and price," he said.
The Rural Health Model, the first of its kind, creates an alternative payment model that transitions hospitals from fee-for-service to global budget payments.
Eight more hospitals and one payer have joined a Pennsylvania initiative to shore up the financial footing of the state's rural hospitals.
"I am especially pleased to see more hospitals joining this important initiative to improve their financial viability so that every Pennsylvanian has access to quality health care within a reasonable distance from home," Gov. Tom Wolf said in a media release.
State officials the program is needed because nearly half of all rural hospitals in Pennsylvania are operating with negative margins and are at risk of closure. Four rural hospitals in Pennsylvania have shuttered since 2006, according to the North Carolina Rural Health Research Program.
The Rural Health Model, the first of its kind, creates an alternative payment model that transitions hospitals from fee-for-service to global budget payments. Those global payments come from several payers, including private and public insurers.
Instead of getting paid for admissions, hospitals in the model will get a preset amount of money to provide services in the community.
State officials say the new payment model allows hospitals time to transform care to better meet the health needs of the community. This includes providing nontraditional roles, such as providing transportation and broadband internet access.
The eight hospitals are:
• Armstrong County Memorial Hospital in Kittanning.
• Chan Soon-Shiong Medical Center at Windber in Somerset County.
• Fulton County Medical Center in McConnellsburg.
• Greene Hospital in Waynesburg, Greene County.
• Monongahela Valley Hospital in Monongahela, Washington County.
• Punxsutawney Area Hospital in Punxsutawney, Jefferson County.
• Tyrone Hospital in Tyrone, Blair County.
• Washington Hospital in Washington, Washington County
A total of 67 hospitals are eligible for model based and nearly 20% of them will participate in in 2020, state officials said.
In addition, Aetna will join five other private payers – Gateway, Geisinger, Highmark, Medicare and UPMC – which combine make up nearly half of the individual and small group market insurance population in the state.
The program is funded and administered by the newly created Rural Health Redesign Center Authority and the Pennsylvania Rural Health Redesign Center Fund.
In addition to providing access to care for rural communities, state officials say the model will ensure that, by remaining open, rural hospitals continue to be a vital economic driver for their communities.
"The Rural Health Model is a transformative step that changes the financial model for hospitals in rural areas," said Pennsylvania Secretary of Health Rachel Levine, MD. "This is a step that will help achieve financial stability for these facilities and aims to improve the overall health of the community."
Since 2005, 162 rural hospitals have shuttered, with 60% of the closures occurring in southern states that did not expand Medicaid enrollment.
Despite a booming national economy, 2019 was the worst year for hospital closings since at least 2005.
The North Carolina Rural Health Research Program says that 19 rural hospitals closed this year, up from 15 closures in 2018, and continuing a steady double-digit trend in closures since 2013.
Since 2005, the North Carolina researchers tracked 162 hospital closings, with 60% of the closures occurring in southern states that did not expand Medicaid enrollment.
Texas led the way, with 23 hospital closures since 2005, followed by Tennessee with 13, and North Carolina with 11.
The closures have been blamed on a number of factors, including: the older, sicker, poorer, and less-concentrated rural demographic; bypassing by local residents seeking care at regional hospitals; hospital consolidation; value-based care; referral patterns of larger hospitals; the transition to outpatient services; and mismanagement.
Among the findings highlighted by the North Carolina Rural Health Research Program:
More than half of the rural hospitals that close cease to provide any type of health care, which were define as abandoned.
Most closures and "abandoned" rural hospitals are in South (60%), where poverty rates are higher, people are generally less healthy and less likely to have public or private health insurance.
Most hospitals closed because of financial problems. 38% of rural hospitals are unprofitable.
In 2016, 1,375 acute care hospitals out of 4,471 urban and rural acute care hospitals (31%) were unprofitable, including 847 rural hospitals (versus 528 unprofitable urban hospitals).
Patients in communities affected by closure travel 12.5 miles on average for care. However, 43% of the closed hospitals are more than 15 miles to the nearest hospital, and 15% are more than 20 miles.
The typical rural hospital employs about 300 people, serves a community of about 60,000. When the only hospital in a county closes, there is a decrease of about $1,400 in per capita income in the county.
University of Minnesota research shows that between 2004 and 2014, 179 rural counties lost all hospital-based OB services.
Over the last 15 years, the difference in mortality between rural and urban areas has tripled – from a 6% difference to an 18% difference in 2015.
Federal policy makers are examining regulations that require more-stringent supervision, or that limit providers from practicing at the top of their license.
The Centers for Medicare & Medicaid Services is asking stakeholders for more input and recommendations on policy changes that could eliminate some Medicare scope of practice restrictions.
Specifically, federal policy makers are considering revamping regulations that require more-stringent supervision than provided now by existing state scope of practice laws, or that limit providers from practicing at the top of their license.
CMS is acting on the executive order #13890, Protecting and Improving Medicare for Our Nation's Seniors.
"These burdensome requirements ultimately limit healthcare professionals, including Physician Assistants and Advanced Practice Registered Nurses, from practicing at the top of their professional license," CMS said in a media release.
But expanded scope of practice for advanced practice practitioners has been contentious. Physician groups have insisted on medical-doctor supervision of advanced practice practitioners.
For example, in 20 states, a physician must co-sign a percentage or number of physician assistant charts, according to the American Medical Association. In 39 states, there are limits on the number of physician assistants a physician can supervise or with whom a physician can collaborate.
CMS said it has already made regulatory changes in payment rules, including the CY 2020 Physician Fee Schedule, Home Health, and Outpatient Prospective Payment System final rules.
These changes include a redefinition of physician supervision for PA services, allowing therapist assistants to perform maintenance therapy under the Medicare home health benefit, and reducing the minimum level of physician supervision required for hospital outpatient therapeutic services.
"We are proud of the work accomplished," CMS said. "Now we need your help in identifying additional Medicare regulations which contain more restrictive supervision requirements than existing state scope of practice laws, or which limit health professionals from practicing at the top of their license."
Additional recommendations and comments should be sent to PatientsOverPaperwork@cms.hhs.gov with the phrase "Scope of Practice" in the subject line by Jan. 17, 2020.
Michael Dowling challenges healthcare CEOs nationwide to join campaign to stop the bloodshed.
It's time for healthcare leaders to take a stand against firearms violence!
That's what Northwell Health President and CEO Michael Dowling is doing, with a pledge of $1 million to mobilize healthcare providers to combat gun violence as a national public health crisis.
The leader of the largest health system in New York State is also challenging his colleagues at other large health systems in the region to match the investment.
"I have been frustrated by the inability of many health system CEOs to stand up and talk about the issue of gun violence," Dowling told more than 170 attendees at Northwell's Gun Violence Prevention Forum, this month in Manhattan.
Northwell organized the conference to increase awareness of gun violence as a public health issue and leverage the power of a $3.5 trillion industry with a workforce of more than 18 million to find ways of stopping the bloodshed. The conference included physicians, trauma surgeons, researchers, policy experts and healthcare executives.
The movement has its own hashtag #ThisIsOurLane.
"CEOs can't be silent anymore, not on an issue this big. If you have the courage and strength to run a big health system, you should have the courage to stand up and talk about this," he said. "My goal is to get all major health systems in the United States to pledge their support."
Mark Rosenberg, MD, a public health researcher and former head of the U.S. Centers for Disease Control & Prevention’s National Center for Injury Prevention and Control, said most the gun deaths can be prevented by using science. He cited previous government and medical community interventions to eradicate smallpox, reduce smoking, and highway deaths through seatbelt mandates and tougher DUI laws.
"The sound of screaming babies (wounded or killed by gunshots) in my trauma center continues to haunt me," said conference attendee Sheldon Teperman, MD, director of trauma and critical care services at New York city Health + Hospitals' Jacobi Medical Center. "My voice was not loud enough to bring about change, but the healthcare community as a whole has broad shoulders."
The conference drew representatives from more than 100 health systems, and medical and health trade organizations across the country, mostly from outside the New York area.
Dowling called on healthcare leaders to sign on to a call to action that will lay the groundwork for the public health education/awareness campaign on gun violence.
The 408-bed, acute care hospital in downtown Los Angeles becomes the third hospital in the PIH Health system.
Good Samaritan Hospital, Los Angeles this week has cleared regulatory hurdles and has joined PIH Health, the health system announced.
The hospital will be renamed as PIH Health Good Samaritan Hospital. Financial terms of the acquisition were not disclosed.
"Good Samaritan Hospital has an impressive 130-year history and we are thrilled to welcome their physicians, staff, volunteers and patients to the PIH Health network," James R. West, PIH Health President and CEO, said in a media release.
"Adding Good Samaritan Hospital into the PIH Health network enables us to continue to build our resources and expertise to enhance the care and services we provide to all of our patients, offering a high level of both primary and tertiary care, and creating a sustainable model in the current and foreseeable healthcare marketplace."
With the addition of the 408-bed acute care hospital, non-profit, Whittier. California-based PIH Health now operates three hospitals totaling 1,130 licensed beds, and 26 outpatient clinics, with 7,100 full-time employees.
The acquisition was announced in September, and PIH vowed to "invest resources and capital to provide Good Samaritan Hospital with the ability to remain dedicated to the highest quality healthcare in its current location in downtown Los Angeles."
The two hospitals will spend the new year developing a transition plan.
"PIH Health and Good Samaritan Hospital share a common commitment to the health and wellness of the residents of Southern California. We plan to expand services that will benefit even more members of our community," said Andrew B. Leeka, PIH Health Good Samaritan Hospital CEO.
"We believe that combining the resources and expertise of two of Southern California's outstanding health systems will result in enhanced care and services," he said.
PIH's other hospitals are PIH Health Hospital - Downey, PIH Health Hospital - Whittier and PIH Health Physicians.
Founded in 1885, Good Samaritan Hospital has been organized under the auspices of the Bishop of the Los Angeles Diocese of the Episcopal Church.
