Kristine Aznavoorian, RN, MS, had been a practicing pediatric nurse in Boston for five years when she encountered subspecialists known as Pediatric Sexual Assault Nurse Examiners. Now she works with young victims of heinous crimes.
Kristine Aznavoorian, RN, MS, had been a practicing pediatric nurse in Boston for about five years when she became aware of the subspecialists known as Pediatric Sexual Assault Nurse Examiners, or pedi-SANEs.
"It fascinated me," Aznavoorian recalls. "These children are looking for certain help, and I really enjoyed that thought of helping them in a very crucial and traumatic time of need."
Now, in addition to her work as a pediatric emergency nurse at Boston Children's Hospital, Aznavoorian also works part-time as a pedi-SANE for the Massachusetts Department of Public Health at the Essex County Children's Advocacy Center, where she investigates two or three sexual abuse cases each week.
For pedi-SANEs, there is no such thing as routine. The one constant, though: Dealing first-hand with the young victims of heinous crimes is never easy.
"Every case is different," says Aznavoorian, who has been a pedi-SANE for two years. "Every child deals with a traumatic event a little differently. It depends on the developmental level of the child, how old they are. It plays into how they are going to handle the situation, but it is across the board."
In some cases, if there is an opportunity to gather physical evidence of sexual assault for prosecutors, Aznavoorian asks the victim or their families for permission to perform a physical examination.
"The older the children are, the more they kind of get what is going on exactly," she says. "And depending upon what their unique situation is depends upon if they are going to be open to coming to see me, or if they are open to having an exam done. I never know what kind of child we are going to get and if they are going to be willing to see me or even talk to me."
"I try to go in as if I were with any of my patients, such as when I work as a staff nurse in the emergency room. I go in. I introduce myself. I am as friendly as possible. Children feel afraid if they feel certain vibes from medical professionals so I try to give off an open and friendly vibe. Every child reacts a little differently," Aznavoorian says.
"We try to keep the parents in the room. As the children get a little older and become adolescents then maybe they want a little more privacy and they don't want the parents around. But when they're younger we typically have the parents stay because they know their child well and they know best how to comfort their child," she says. "It takes a lot of patience, especially with younger children. But you work as slowly as possible just to make sure they are not afraid. We have a 'stop' rule. If the child is scared or upset or crying, we stop. We don't force the children to do anything they don't want to do. When it comes to evidence collection and an examination, we just try to do it as efficiently as possible without traumatizing the child any further than they already have been."
It's important work. But it is also stressful.
"The burnout factor is actually a concern within our program. It's tough work. I definitely don't take things home with me. I do my job. I focus on the family and the child," Aznavoorian says. "We have monthly meetings where we share our feelings with the rest of the pedi-SANEs and talk about the struggles that we having doing the job and the work that we do. We rely on each other to talk about the tough days and the good days."
The rewards aren't monetary. The satisfaction comes with knowing you have played a role in helping a child recover from a potentially devastating ordeal.
"The older the children are the more they realize that what happened was wrong or wasn't supposed to happen. They tend to think that as a result something is wrong with their body and that people can tell what happened to them just by looking at them," Aznavoorian says.
"This particularly is true with the adolescent population and the young teens. They think something is wrong with them. It's happened to me on numerous occasions where I examine these children and they look at me and say, 'Really? You can't tell something happened?' I say 'No, I can't tell. Your body is perfectly normal just like every other 11-year-old body would look like.' And they are so excited about that. That is what keeps me doing what I do every day."
Wellmont Health System CEO and President Margaret "Denny" DeNarvaez discusses the Tennessee-based system's search for a potential buyer. Not having an immediate need to make a deal is key, she says, because "it is more important to do it right than to do it fast."
Margaret "Denny" DeNarvaez
Wellmont Health System CEO and President
When Wellmont Health System announced this month that it was looking for a partner, the Kingsport, TN-based health system, with seven hospitals serving Upper East Tennessee and Southwest Virginia, said it had "launched a process to evaluate strategic options for the organization's future, including the possibility of aligning with another health system."
Wellmont CEO and President Margaret "Denny" DeNarvaez spoke with me recently about the challenges facing her health system and finding the right partner amid the global shift towards provider consolidation.
HLM: What prompted Wellmont to search for a partner?
DeNarvaez: Quite frankly, we feel like we are in a good position both financially and with our clinical standing in the area to be seeking a partner at a time when we don't need to seek a partner. We are looking proactively at what is out there that would enhance our position and our ability to provide care.
And we're doing that in a time where we don't have a gun to our head and we can be thoughtful about what those partnerships might look like and who they might be with and what they might bring to us beyond what we can do by ourselves.
HLM: What can't you do on your own?
DeNarvaez: It's really more with respect to what we know is going to happen in the next few years than it is an immediate need. There is nothing per se today that we are not able to do as a result of our financial position. But we look downstream and we see the significant reimbursement cuts that continue to come and we look at the penalties that will also continue to increase, year over year, for failure to meet certain standards.
The reality is the headwinds in healthcare are going to be pretty strong. To combat that there is going to be a change in the business model for healthcare. Many folks will be taking on risk so they can advance healthcare in a different fashion from what we have traditionally done. To do that we definitely believe a partner would be a preferred option.
We are in an area that does not have the population that is necessary to take on risk. It's common wisdom that you need a minimum of 50,000 lives and many people would say much more than that. We are in a total market area of 400,000 people. So obviously that is going to be very difficult.
HLM: What are Wellmont's selling points?
DeNarvaez: We are market leaders in the areas where we do business by far—a two-to-one preference. We are running very strong facilities both clinically and financially. When it comes to cardiology and oncology, there is nothing shy of transplants that we aren't doing. They will be very surprised at the level of sophistication of the physician community and the caregivers and the technology.
They will be excited when they see the level of sophistication of the board. These are not folks just being fed information from management. They are knowledgeable about the difficulties in healthcare and they also know what they want for the community."
They will be impressed with our senior team. I have been at the CEO level for over 20 years and this is the strongest management team I have ever worked with. It's helped position us in a challenged fiscal market.
Those who have gotten to know us just a little bit are always stunned to see what we have done at the level of reimbursement in this area with the payer mix we have. That may be an area where they would see that we could help them. That is one of the things we hope, too, that it's not a one-way partnership.
We are looking for things, but we will be able to show them how to work in an environment that is very challenging and yet produces the kinds of results we are producing. There will be plenty they will be impressed with.
HLM: Are you looking at an affiliation or an outright acquisition?
DeNarvaez: We have no preconceived notions of what the partnership should or shouldn't be. We will have a financial advisor go through this process with us because we need to reconcile what we may want versus what a partner might want.
We are aware that for some partners, a clinical affiliation might be of interest. It may not be for some entities. And it may not meet our needs either. We want the right partner who meets our needs and we can get the kind of commitments to the community and the health of the community that we are looking for. We are not looking to acquire another entity. We would be willing to be acquired another entity.
HLM: Is this a hard sell for your community?
DeNarvaez: I have been proud of our community. For the most part we were concerned about being very vocal with our community in advance of actually beginning this phase of the investigation. But it is a community asset and we felt it was the right thing to do. They have responded with gratefulness that we have kept them apprised of what we are doing and that this isn't going on in a smoke-filled backroom.
The community includes successful businessmen who understand that size and scale matter, getting both intellectual and fiscal capital matters. I personally haven't heard anything but positive comments. That's very telling about using an approach that is not going to be done haphazardly.
It's going to be done very thoughtfully. And it is meant to be in the best interests of the community. We have a sophisticated board that is trusted by the community and that goes a long way toward making them feel comfortable about the process and the people who are driving it.
HLM: Both Tennessee and Virginia have rejected Medicaid expansion money. Was that a factor in your decision to seek a partner?
DeNarvaez: It wasn't the factor, but there is no question that it was a factor. Generally speaking it is just another indication of how hard it is to have a solid fiscal plan when in our case, 70% of our revenues come from a government source that is very much subjected to that type of decision making.
By a flip of the pen one way or the other, millions of dollars of revenue can be taken or diminished. If we were 10% Medicare and 5% Medicaid as a payer mix, that would be a different conversation. Medicare makes up over 50% of our payer mix and Medicaid makes up 13% and we have 9% or so in complete no pay. When you have that sort of a payer dynamic, it also is more subjected to these types of changes that have come very rapidly and don't allow you enough time to change your infrastructure to respond to it.
HLM: Are you concerned about the funding status for rural hospitals?
DeNarvaez: We had to close one of our rural facilities for a combination of issues. Probably more significant than the financial losses, although they were significant, was the inability to recruit and retain physicians. That is a growing issue because our economic challenges regarding what the government is going to do also translate into physicians who don't wish to work in an environment where they don't know from one day to the next what their economic challenges are going to look like.
And frankly even if they are employed by the health system, they also know the health system would have to make dramatic changes if disproportionate share went away. That would be a significant crisis for many hospital systems, not just our own. And the rural facilities are by far the most impacted in those discussions because there is a heavier concentration of Medicaid.
HLM: What is your timetable for some sort of partnership?
DeNarvaez: This month we will send a (request for proposal) to three financial advisor firms. In short order we will make a decision as to which one will be our advisor for this second phase. They will help us determine a list. I don't know if that list will have two candidates or 10 candidates. We will have a small group from the board and myself doing our homework to interview those folks and make sure we are talking the same talk and that we are interested in one another and interested in the same things about one another.
There is no real time table for that. If it takes us six months from start to finish to find the best partner, so be it. If it takes another six months to find what the right transaction is with that partner, so be it.
It's one of the beauties of being proactive in this regard. We don't have a timetable. We don't have a gun to our head. And we do think it is more important to do it right than to do it fast. We do believe that in 2014 we would be pretty far down the line selecting a partner and a transaction to be done.
HLM: Is there a deal breaker or a deal maker with potential partners?
DeNarvaez: There certainly are criteria that we will be testing for. One is that they are consistent with our own mission vision and values. To be candid, the more they look like us, talk like us, and act like us, the easier this will be. We are very committed to our service and quality agenda and we want a partner who is equally concerned with that. Culture will matter.
We are clearly going to look for a financially sound entity. We are a BBB+ plus bond rated entity. Those that would be interesting to us would be A-rated entities and above. We don't want to sign up with a partner who might also be looking for a partner. We want a partner who is committed to the technological advances that we have been committed to.
We have made a huge investment in Epic electronic records. We want a partner who is equally sophisticated in their medical and intellectual property. We want to know what they are invested in, what they have done with it, how they have used these tools.
We want a partner who can help us recruit physicians. We have strong service lines and strong medical staffs but when someone retires it is not obvious where a replacement is coming from. We have a strong commitment to physicians as leaders.
There are other criteria, but those are the ones that come to the top of mind right now. Clearly, as we listen to their stories, as we listen to who they are as an entity, we are going to look for certain markers that match up with our philosophy.
Many of the people in the 18-to-24-year-old demographic who've signed up for coverage under health insurance exchanges may be among the least healthy in their cohort, says Moody's Investors Service.
Despite assurances from the Obama Administration that growing numbers of "young invincibles" are signing up for coverage on the health insurance exchanges, skeptics including analysts at Moody's Investors Service remain fearful that the risk pool will remain skewed towards older and sicker Americans.
Last week the Department of Health and Human Services released the latest enrollment figures for the exchanges through late Dec. 28. While the pace of the sign-ups increased about seven-fold in December—nearly 1.8 million people signed up for coverage that month—only about 24% of the new enrollees were in the coveted 18-34-year-old age group.
HHS officials said they saw an eight-fold increase in the numbers of young adults signing up for coverage, but the totals so far are well below the 40% threshold that Obama Administration officials had hoped for. With that in mind, Moody's Investors Service said this week that the preliminary healthcare exchange demographics are a credit negative for health insurers.
"The enrollment statistics show that only 24% of those who have enrolled in the exchange for private healthcare insurance are in the critical 18-34-year-old age group, well short of the 40% target based on the proportion of eligible people in this age group," Moody' said.
"The way the exchange products are structured and priced, a sizable portion of these healthy individuals must enroll so their lower claim costs can subsidize the higher anticipated claim costs of less healthy individuals."
Moody's said health insurers mandated to provide coverage for a risk pool that is skewed towards older and less-healthy people would see higher medical costs and reduced earnings in 2014, and would find themselves pressed to raise premiums in 2015. "Neither outcome bodes well for a vibrant insurance exchange, which insurers had been counting on for increased revenues and income," Moody's said.
The bond rating agency noted that WellPoint, Inc. (Baa2 stable) and Health Net, Inc. (Ba3 positive), are particularly exposed to potential losses because they have aggressively taken part in the exchanges.
HHS officials said there is still plenty of time for young adults to sign up for coverage before the enrollment period ends on March 31.
A new marketing effort was launched this month to encourage younger people to enroll. And Obama Administration officials noted that Massachusetts saw similar enrollment patterns with younger people when that state mandated universal coverage several years ago.
Still, Moody's analysts were not assuaged.
"Despite the Obama administration's optimism, we continue to have doubts about the enrollment outlook based on the economics of the situation for those not receiving a government-provided subsidy to offset premiums," Moody's said.
"The economics for healthy young individuals do not provide much incentive for them to sign up. For those not eligible for a subsidy, a low-cost plan on the insurance exchange will cost more than $100 per month and will carry a high deductible of several thousand dollars. On the other hand, the penalty for not having health insurance during 2014 is minimal (for an individual, it is limited to the greater of $95 or 1% of income)."
Clare Krusing, spokeswoman for America's Health Insurance Plans, says payers aren't making any rash assessments about the risk pool in the middle of enrollment. "We are still in January and we still have to go through the entire open enrollment process to really understand and at the end of the six-month period what those numbers are going to mean for the marketplace," she says. "But there is broad agreement that you have to have broad participation from young and healthy people for all of these reforms to work."
Moody's said it suspects that many of the people in the 18-to-24-year-old demographic who've signed up for coverage may be among the least healthy in their cohort or they may be covering specific healthcare expenses in the coming year, such as young couples needing maternity benefits. If suspicions prove to be correct, the cohort will not provide the financial support needed to cover the higher medical costs of older enrollees, Moody's said.
In addition, Moody's said a considerable percentage of the 18-34-year-old demographic could potentially cancel its policies after a few months. "The probability of cancellation may be higher for those who purchased a policy as a result of a marketing push rather than a perceived need," Moody's said.
"Although these individuals may have been convinced of the value of a comprehensive health insurance package, the monthly premium requirement, along with a lack of need to obtain medical care, may cause them to re-evaluate."
In need of financial stability, Wellmont Health System is reviewing its options, including possibly aligning with another health system. California-based Daughters of Charity Health System believes "new ownership is in the best interest" of the communities it serves.
Wellmont Health System is looking for a partner.
The Kingsport, TN-based health system, with seven hospitals serving Upper East Tennessee and Southwest Virginia, announced this month that it has "launched a process to evaluate strategic options for the organization's future, including the possibility of aligning with another health system."
Wellmont CEO Denny DeNarvaez says the myriad pressures and uncertainties in the healthcare sector have created an especially challenging environment for smaller, more isolated health systems. The challenges, named in a statement released by Wellmont, include the increasing sophistication of information technology and its cost, quality mandates, demand primary care services and population health management, lower patient volumes, reimbursement cuts and performance penalties under the Patient Protection and Affordable Care Act.
"Unlike many health systems, Wellmont is fortunate to be in a position of clinical strength and relative financial stability thanks to the great work of our physicians, co-workers and leadership," DeNarvaez said. Nevertheless, Wellmont must improve its financial position by millions of dollars during the next several years, she added. "The board and the administration are committed to continue pursuing all internal options to ensure the financial stability of our health system for the future.
Wellmont's challenges are particularly acute in Upper East Tennessee and Southwest Virginia, a service area that grapples with low Medicare payments and a high volume of Medicaid and uninsured populations. In fiscal 2012, Wellmont had a community benefit of $94 million, which included $77 million in uncompensated care, as well as free programs and services provided to the community, and cash and in-kind donations to community groups. Making matters worse, Virginia and Tennessee have not expanded Medicaid coverage.
The Wellmont Board has created a special committee to assess its options.
Daughters of Charity Health System (CA) Seeks Buyer
Los Altos Hills, CA-based Daughters of Charity Health System has announced that it is soliciting proposals from Catholic, public, non-profit and for-profit organizations either to buy the system's individual hospitals or the entire health system.
DCHS President/CEO Robert Issai said in prepared remarks that the decision came after a long review of the options available to preserve services at the health system, which includes six hospitals located along coastal California from San Francisco to Los Angeles.
"After careful consideration, our Board, management team, and advisors have determined that the sale of our hospitals is the most sound and responsible business decision," Issai said. "Like other health systems across the country, we recognize that the way health care is provided today—where it is offered, how it is paid for, how it is measured—is changing dramatically, and we believe that new ownership is in the best interest of the communities we serve."
Last year DCHS formed an affiliation with Ascension Health, which remains in effect. Issai said that DCHS has benefitted from the affiliation, but that it won't merge with Ascension Health.
DCHS Board Chair, Sr. Marjory Ann Baez, DC, called the decision to sell the healthcare ministry "difficult, particularly for the Daughters of Charity. But the realities of modern healthcare are harsh, and after prayerful discernment, it became clear that the responsible thing to do is to find new ownership, blessed with the resources necessary to thrive."
DCHS has already begun pursuing the sale of its hospitals in Northern California and is starting the process for its Southern California hospitals and the health system as a whole.
HCA TriStar Buys Grandview MC from Capella
HCA's TriStar Division has announced it is buying Grandview Medical Center from Capella Healthcare. Financial terms were not disclosed.
The 70-bed Grandview Medical Center is located in Jasper, TN, near Chattanooga, and serves five counties in Tennessee, Georgia, and Alabama. The hospital will become part of the Parkridge Health System in HCA's TriStar Division. With the acquisition of Grandview, the Parkridge Health System will grow to five hospitals in the Chattanooga market.
"The addition of Grandview Medical Center will enhance our ability to serve the Chattanooga market and deliver the highest quality patient care possible close to where people live and work," Steve Corbeil, president of HCA's TriStar Division, said in prepared remarks. "We look forward to welcoming Grandview to TriStar and Parkridge Health System."
The transaction awaits regulatory approvals but is expected to be completed by the end of March.
Data collected from 11 states strongly suggests that the question to ask about the patient-centered medical home model is not whether it reduces healthcare costs and improves outcomes, but how well.
Forgive me for preaching to the choir, but another round-up of studies released this week re-confirms what we already know: Patient-centered medical homes improve health outcomes and reduce costs.
In fact, the question is no longer "will they work?" Evidence increasingly settles that question. Now the questions center around just how effective PCMHs can be in reducing costs and improving outcomes.
Consider the findings in an analysis released this week from the Patient-Centered Primary Care Collaborative. It's a composite of peer-review and industry-generated studies, showing that the PCMH model is reducing costs of care, unnecessary emergency department and hospital visits, and increasing the use of preventive services and improving population health.
These findings are more than regional success stories. The study includes data from 20 PCMH projects in 11 states from New Hampshire to Alaska, and national data from PCMHs serving active-military and veterans, which show that 60% of the PCMH evaluations reported decreases in cost of care or use of unnecessary services, while 30% saw improved population health.
Diabetes Care Results
The Colorado Multi-Payer PCMH Pilot Model that focused on diabetic care posted particularly impressive result over three years, which included:
A 15% reduction in ED visits, compared with 4% for a control group;
18% fewer inpatient admissions compared to an 18% increase for the control group;
No increase in specialty referrals compared with 10% increase for the control group; and
A return on investment ranging from 2.5:1 to 4.5:1 for every dollar spent by WellPoint on the pilot.
In addition, 95% of the patients said the care was efficient and well organized and 97% said they would recommend the program to family and friends.
The Blue Cross Blue Shield of Michigan Physician Group Incentive Program reported that practices with full PCMH implementation had savings of $26.37 per patient per month and a 5.1% higher "prevention composite score" than colleagues in traditional practice settings.
While not every PCMH pilot can claim these levels of success, virtually every pilot examined by the Collaborative demonstrated improvements over the traditional fee-for-service practice model that provides incremental, episodic care and incentivizes volume.
No Easy Path to PCMH
These measureable results reflect the remarkably simple concept behind PCMH, which is to proactively manage patient chronic care to reduce expensive episodic care. The results are healthier, engaged patients and reduced costs.
We are hearing from any number of providers across the nation, however, that the actually journey to become a PCMH is not easy. The process is rife with snafus with electronic medical records, interoperability roadblocks, reimbursement challenges, and grueling federal mandates and timelines.
It's important to remember that these PCMHs are largely pilot projects that are providing the first rough drafts of how a value-based care model will work. The PCMH is still a work in progress, but it's already demonstrated that it can reduce the cost of care, reduce ER visits and inpatient admissions, improving population health, access to care and patient satisfaction. Even with the rough spots, that seems like a reasonable trade-off.
There is nothing to suggest that any start-up woes in the PCMH model are permanent. In fact, it seems reasonable to presume that PCMHs will continue to improve care and efficiencies while reducing costs as they gain more experience and refine the model.
Early Finding Stand Up to Scrutiny
Clearly, the Collaborative has a bias here in placing PCMHs in the best possible light. But I don't think they're cooking the data and I would be happy to speak with any skeptics who can show me that the PCMH model doesn't work. Of course, skeptics should be prepared to provide their blueprint for "bending the cost curve" in healthcare.
Obviously, I am an unabashed fan of the PCMH. The returns may be preliminary, but the trends are inarguable. It is gratifying to see that a complex but innovative care model which makes so much sense is delivering on its potential for improving care while reducing costs. Even better, we should fully expect that these results will improve in the coming years.
For now, the composite results gathered by the Collaborative are very impressive. PCMH advocates shouldn't be afraid to crow about the findings. As Walt Whitman once wrote: "If you done it, it ain't bragging."
Physicians' associations generally support improving access and transparency in Medicare reimbursement records within the proper context and with privacy protections, but caution that "you can't always use this data as a proxy for quality."
The federal government has issued a new policy for public disclosure of physicians' Medicare payments.
Jonathan Blum, principal deputy administrator for the Centers for Medicare & Medicaid Services said in a statement posted Tuesday by CMS that the modifications, posted in the Federal Register, will improve transparency and accessibility for the public while maintaining the privacy of Medicare beneficiaries.
The policy takes effect 60 days after its publication in the registry, which is expected this week. Blum says CMS will evaluate requests for individual physician payment information or requests for information that combined with other publicly available information that could be used to determine total Medicare payments to a physician on a case-by-case basis.
CMS will also generate and make available aggregate data sets regarding Medicare physician services for public inspection.
"Given the advantages of releasing information on Medicare payment to physicians and the agency's commitment to data transparency, we believe replacing the prior policy with a new policy in which CMS will make case-by-case determinations is the best next step for the agency," Blum wrote.
"However, CMS also recognizes the valid concerns raised by many stakeholders over protecting the integrity of the data. As CMS makes a determination about how and when to disclose any information on a physician's Medicare payment, we intend to consider the importance of protecting physicians' privacy and ensuring the accuracy of any data released as well as appropriate protections to limit potential misuse of the information. And as always, we are committed to protecting the privacy of Medicare beneficiaries."
Physicians' Reactions
Representatives from physicians' associations said Tuesday they were still reviewing the new policy, but that they generally support improving access and transparency in Medicare records as long as the data is placed in its proper context.
Reid B. Blackwelder, MD, president of the American Academy of Family Physicians, says the his organizationhas been involved in the comment process for the modifications and continues to support the move towards greater transparency in medical records and billing.
"There can be a lot of value in releasing payment data, especially if it is focused on ensuring and improving quality of care," Blackwelder says. "The key continues to be the correct use. The trouble with data is [that] it's numbers. We emphasized the real need to ensure appropriate context. We want to make sure they just don't release numbers because you can get a lot of assessments or conclusions drawn that may not be true unless you have appropriate context and consideration."
Shari Erickson , vice president of governmental and regulatory affairs at the American College of Physicians, says the college also embraces "the move towards more data transparency overall in the healthcare system. That is going to be needed particularly as we move into this bold new world of value-base payments. You really are going to need more transparency to do that effectively."
Like Blackwelder, however, Erickson says putting the data in its proper context is critical. " There are definitely some protections and caveats that should be looked at with any data source that is being reported on, " she says.
Pay Data Not 'A Proxy for Quality' "There should be reasonable transparency around the process of the data collection and reporting of that data so we know where the data comes from and what it means and what are its limitations. All of those things need to be up front anytime data is reported to the public. It needs to be reported in a meaningful and hopefully useful way for the public and the audiences that it is intended for."
Jennifer Gasperini, senior government affairs representative for the Medical Group Management Association, says everyone wants transparency. "The trickier issue is how we are measuring some of these things," she says. "For that reason you can't always use this data as a proxy for quality. It is something we will be looking at and continuing to watch."
Blackwelder says he doesn't believe the rules modifications will have much of an effect on the day-to-day operations of most physicians' offices. "We feel very strongly that with any release of data that the physician has an opportunity to review and ensure that the data is correct. Otherwise there isn't going to be anything a physician is going to notice in day-to-day practice," he says.
A survey from the American College of Healthcare Executives reaffirms the top issues affecting community hospital leaders. Among the top-of-mind issues: Government funding cuts, the shift to value-based purchasing, and CMS and state regulations.
For the tenth straight year "financial challenges" have been listed as the number one concern of healthcare executives, according to an annual survey from the American College of Healthcare Executives.
Coming in second was healthcare reform implementation, followed by government mandates, and patient safety and quality, both of which ranked third.
"You've heard the famous quote: No margin no mission. This just reflects the enormous stresses that hospitals are under right now," says Deborah J. Bowen, president/CEO of ACHE.
"Everybody is reducing operating costs and thinking differently about how they are going about moving from fee-for-service to these value-based payments where quality and finances are accounted for. It's not business as usual by any stretch of the imagination."
The 388 community hospital CEOs who responded to the survey were asked to rank 11 issues affecting their hospitals in order of importance and to identify specific areas of concern within each of those issues.
Among financial concerns, for example, government funding cuts ranked highest, led by inadequate reimbursements for Medicare and Medicaid, followed by an anticipated increase in bad debt due to high-deductible health plans, decreasing patient volumes, staffing costs, competition from other providers, and inadequate funding for capital improvements.
Within the healthcare reform rollout, the top issues were reduced operating costs, aligning incentives for payers and providers, the shift to value-based purchasing, physician alignment, and regulatory uncertainty.
Within the category of government mandates, the top concerns were CMS audits, implementation of ICD-10, CMS regulations, state regulations, and increase government scrutiny by the IRS, the Office of the Inspector General, and the Justice Department.
Patient safety and quality concerns included engaging physicians to improve the quality culture, redesigning care processes, pay for performance, and redesigning work environments to reduce errors.
Bowen concedes that the survey provided few surprises.
"What is a little interesting is this juxtaposition of government mandates and patient safety and quality and how the government mandates were high last year and patient safety and quality are even higher this year in terms of concerns and engaging physicians and redesigning care," she says.
"It speaks well to the fact that the industry is moving forward in their quest to redesign care, but they are painfully aware that the environment they are doing that in is fraught with other constraints that they have to be very realistic about."
Though void of surprises, Bowen says the survey provides a state-of-industry snapshot about the concerns of hospital leadership.
"It is pointing out some real concerns to grapple with," she says. "We've seen concerns around financial challenges. A lot of that has to do with Medicare funding and we all know the predicament that a lot of states were in with respect to funding Medicaid. In some respects that is not necessarily a new problem, but the magnitude is getting larger and larger as we seek to cover patients in growing numbers as Obamacare takes hold."
"We know that bad debt and everything else is going to get worse with high-deductible plans. In some respects it is more of the same, but the magnitude and the order of it might be changing somewhat," she says. "I also think there is promising news in the sense that patient safety and quality care are moving forward in a very challenging time."
Bowen says she doesn't expect the concerns of healthcare executives to shift much in next year's survey either.
"We won't see anything wildly different, but we will see some of the same themes, perhaps in a different order," she says. "Financial challenges have been on the top of the list for a long time because you have to have a certain amount of money to keep organizations afloat. It is interesting that patient safety and quality and redesigning care and engaging physicians are tops on the list. The order may shift a little bit but I don't think this is momentary transition. It's going to take a little while for accountable care to take hold and be the new paradigm for healthcare."
Tighter margins, industry consolidation, and uncertainty surrounding healthcare reform, are tamping down healthcare hiring. "Everyone is afraid of what will happen and is too scared to hire," says one healthcare economist.
We're getting conflicting narratives about healthcare job growth.
The story line we've heard for the last decade or so tells us that healthcare is an excellent job growth market, particularly for people with advanced degrees and specialties.
That narrative has been backed up by consistent data from the Bureau of Labor Statistics, which has shown that the healthcare sector is one of the more robust job growth engines for the overall economy. In the last decade, for example, BLS data shows that the now-$2.8 trillion healthcare sector created more than 2.7 million jobs, with most of those new jobs in ambulatory services.
Until recently, there's been some sort of unsubstantiated belief that healthcare was immune from the growing pains and economic downturns of other industries. There was also a consensus belief was that healthcare reform and the expansion of health insurance coverage through commercial exchanges and Medicaid would only increase the demand for skilled healthcare workers, particularly clinicians and information technology experts.
While the immunity theory has pretty much been debunked, in some respects it still holds true that skilled clinicians will continue to be in demand.
However, in the last few months of 2014 a new narrative has emerged. In December, the healthcare sector shed 6,000 jobs, led by 4,100 job reductions in ambulatory services and 2,400 reductions at hospitals. That was not just a one-month blip. BLS data shows that in the fourth quarter of 2013, hospitals shed 500 jobs. Unfortunately the data is not granular enough to show us specifically what kinds of jobs are being lost.
The healthcare sector created 207,600 new jobs in 2013, considerably down from the 320,600 healthcare jobs created in 2012, but more in line with historical trends from the past five years.
A breakdown of BLS preliminary data for 2013 shows that hospitals created only 9,800 new jobs in 2013, well below the 73,300 jobs created in 2012 and the lowest total since 2009, when only 2,700 hospital jobs were created in the midst of a deep recession. Ambulatory services continue to be the primary job creator for the healthcare sector, posting 180,100 new jobs in 2013. That's down from 208,400 jobs created in 2012. Nursing and residential homes created 17,700 in 2013, less than half of the 38,900 jobs created in 2012.
What's going on here?
'Too Scared to Hire'
Medicare reimbursement cuts, an avalanche of sweeping and complex new federal mandates from meaningful use to ICD-10, the looming shift toward value-based payment models, the sector-wide shift toward out-patient services and population health, and the general uncertainty about how the Patient Protection and Affordable Care Act will play out has led many providers to re-evaluate their hiring practices.
"Everyone is afraid of what will happen and is too scared to hire," says Richard "Buz" Cooper, MD, a healthcare economist at the University of Pennsylvania. "Most are feeling the pressures of reimbursement cuts and are getting rid of employees. In the contest that is unfolding between government, insurers and providers, both government and insurers are mega-sized, while providers are too small to fend them off. No surprise that providers are consolidating."
Add to that, healthcare spending growth is at 53-year low. Actuaries at the Centers for Medicare & Medicaid Services earlier this month said that the 3.7% increase in healthcare spending in 2012 tracked the fourth straight year of relatively slow growth and actually declined slightly as a percentage of the gross domestic product.
And as much as Obama Administration officials would love to take credit for this spending downturn, the real driver here is the consumer. Healthcare spending slowed dramatically during the recession, because people either lost their insurance coverage through layoffs, or they delayed elective procedures and other medical care because of the general economic uncertainty.
As we emerge from the recession, we find that the healthcare landscape has changed, thanks largely to the advent of the high-deductible health plan. As consumers shoulder most of the cost of their care through higher co-pays and deductibles it seems only logical that they will cut back on personal spending on healthcare goods and services, which CMS says account for about 85% of total national healthcare spending.
Facing these daunting external challenges, it makes perfect sense that providers are reluctant to hire more staff. Labor costs are the largest slice of providers' budgets so naturally that'd be the first place they'd look for reductions when margins tighten.
Two Job Healthcare Markets Emerging Mergers and consolidations undoubtedly are playing a huge role in layoffs. Merge two hospitals or a physicians' group and suddenly a lot of administrators and support staff become redundant. And there is no indication that M&A activity will slow anytime soon as providers struggle for leverage with payers.
What will 2014 bring? Based on what I'm reading and hearing, we will see the continued trend of two divergent job markets within the healthcare sector.
For support and administrative staff there will continue to be tepid, marginal growth, not because there is growing demand, but because healthcare is simply a massive, labor-intensive industry. The healthcare sector accounts for more than 14.6 million jobs so attrition is inevitable. People retire. People get fired. People quit. People move. People are replaced. We will see job growth but likely not the pace that we've seen over the past 10 years.
The Conference Board regularly tracks online ads for healthcare support jobs—the "have nots" of the healthcare universe—and finds that there are more than two people looking for every job advertised. The jobs also pay about $13.36 an hour.
That factoid is inverted for skilled clinicians, executives and technology folks; aka the healthcare "haves." The Conference Board shows that there are more than two jobs advertised for every skilled healthcare jobseeker, with an average salary of $35 an hour.
Anecdotally, recruiters across the country routinely tell me they're finding a robust market for skilled clinicians in every part of the country.
The bottom line: Healthcare providers are consolidating in an era of tighter margins and decreased utilization. Of course hiring is going to take a hit. Because of its vital nature, the healthcare sector may be more resistant to the economic forces that affect every other industry. It's not immune.
Preliminary data from the Bureau of Labor Statistics shows that in 2013, hospitals created the lowest total number of jobs since 2009.
The healthcare sector created 207,600 new jobs in 2013, considerably down from the 320,600 healthcare jobs created in 2012, but more in line with historical trends from the past five years, according to Bureau of Labor Statistics data released Friday.
A breakdown of BLS preliminary data for 2013 shows that hospitals created only 9,800 new jobs in 2013, well below the 73,300 jobs created in 2012 and the lowest total since 2009, when only 2,700 hospital jobs were created in the midst of a deep recession.
Ambulatory services continue to be the primary job creator for the healthcare sector, posting 180,100 new jobs in 2013. That's down from 208,400 jobs created in 2012.Nursing and residential homes created 17,700 in 2013, less than half of the 38,900 jobs created in 2012.
In December, the healthcare sector went out with a wimper in 2013, shedding 6,000 jobs for the month, led by 4,100 job reductions in ambulatory services and 2,400 reductions at hospitals.
In the fourth quarter of 2013, hospitals shed 500 jobs, BLS preliminary data shows. At the end of 2013, the healthcare sector accounted for 14.66 million jobs, including 6.6 million in ambulatory care, 4.83 million in hospitals, and 3.22 million in nursing and residential care.
BLS data for December and November is considered preliminary and subject to considerable revision.
The reimbursement squeeze on hospitals is on, and healthcare leaders in search of opportunity are finding partners and making deals.
As the new year unfolds and financial challenges mount, hospital executives seeking business opportunities continue to make deals with like-minded organizations.
Duke LifePoint in $120M Deal with Wilson Medical Center
Duke LifePoint Healthcare will form a joint venture with the 294-bed Wilson Medical Center in Wilson, NC, in a deal that includes $120 million in capital investments and resources to strengthen and grow the hospital.
Under the terms, Duke LifePoint would own 80% of the joint venture, while Wilson Medical Center and the community would have a 20% stake. The joint venture would commit to $120 million in capital investments at Wilson Medical Center over the next decade.
Governance of Wilson Medical Center would be shared equally by Duke LifePoint and Wilson through the creation of a 10-member board with equal representation from both organizations. The joint venture would become a taxpaying organization.
Duke LifePoint owns four hospitals, including Maria Parham Medical Center, Henderson, NC; Marquette General Health System, Marquette, MI; Person Memorial Hospital, Roxboro, NC; Twin County Regional Healthcare, Galax, VA; as well as DLP Cardian Partners, a Charlotte, NC-based company that offers hospital-based catheterization labs and mobile catheterization services.
Banner Health to Acquire Casa Grande RMC
Banner Health will acquire Casa Grande Regional Medical Center, a 177-bed, not-for-profit community hospital located about 50 miles south of Phoenix, AZ, the two providers announced jointly. Financial terms were not disclosed.
"CGRMC's mission has always been to make a positive difference in the lives of those we serve through compassion and excellence in patient care. This fits perfectly with Banner's mission as well. Furthermore, joining with Banner allows CGRMC the best opportunity to grow this facility in the long term. We look forward to a bright future," said Rona Curphy, president/CEO of CGRMC.
The deal is subject to regulatory approvals, but is expected to be completed this spring. Banner has also agreed to provide interim funding as needed in order for CGRMC to continue regular operations until the acquisition is complete.
Banner Health President/CEO Peter S. Fine said the acquisition "will build on the strong foundation provided by Casa Grande Regional Medical Center to expand Banner's non-profit mission of excellent patient care to the community of Casa Grande. Community residents can count on the full suite of clinical performance processes and technologies that are the foundation of Banner's ability to provide industry-leading care."
Headquartered in Phoenix, Banner Health is one of the largest non-profit health care systems in the country. The system operates in seven states with assets that include 23 acute-care hospitals, the Banner Health Network, Banner Medical Group, long-term care centers, outpatient surgery centers, and an array of other services.
WellMont Health Weighs Its Options
Kingsport, TN-based Wellmont Health System has begun an evaluation of its strategic options, which executives say may include aligning with another health system.
Wellmont CEO Denny DeNarvaez said health systems across the country are preparing for increasing demands for upgrading information technology, quality mandates, and population health management in an environment of low inpatient volumes, reimbursement cuts, and potential performance penalties under the Patient Protection and Affordable Care Act.
DeNarvaez says the seven Wellmont hospitals serving Northeast Tennessee and Southwest Virginia face a litany of challenges because of extremely low Medicare payment rates and the high volume of Medicaid and uninsured populations, and the recent decisions by state the governors of Virginia and Tennessee not to expand Medicaid.
"As stewards of a valued community resource, our board of directors and leadership team know it is our responsibility to preserve and advance healthcare in our region," DeNarvaez said in prepared remarks.
"Unlike many health systems, Wellmont is fortunate to be in a position of clinical strength and relative financial stability thanks to the great work of our physicians, co-workers and leadership. The board and the administration are committed to continue pursuing all internal options to ensure the financial stability of our health system for the future."
DeNarvaez says the "guiding principles" that will govern the assessment include:
Significant financial strength to advance medical, technological and organizational innovation and to develop new care models
Optimization of information and medical technology systems
A robust physician network and physician recruitment capacity and commitment to physician leadership
"By proactively embarking on this process, we are taking our future into our own hands and creating a stronger health system for the communities we serve," DeNarvaez said
HMA Stockholders Accept CHS Merger Offer
Stockholders at Naples, FL-based Health Management Associates have voted overwhelmingly to accept the previously announced merger agreement with rival Community Health Systems, Inc., of Franklin, TN. The deal was announced jointly last week by the two for-profit hospital chains.
HMA said its stockholders approved the transaction with approximately 98.7% of the votes cast at a special meeting on Wednesday favoring the agreement, representing approximately 81.7% of HMA's outstanding common shares.
CHS Chairman, President, and CEO Wayne T. Smith, Chairman said he was "pleased that HMA stockholders have seen the significant strategic value in combining with CHS. We are working now to finalize regulatory approvals, and we expect to complete this transaction quickly so that we can integrate our two companies and deliver on our plans for long-term growth and value creation."
The deal is expected to be completed prior to the end of this month and is subject to customary closing conditions, regulatory approvals, and the absence of certain adverse developments.
The deal combines two of the largest publicly traded hospital chains in the nation. CHS owns, leases, or operates 135 hospitals in 29 states with an aggregate of approximately 20,000 licensed beds. HMA through its affiliates operates 71 hospitals in 15 states with approximately 11,000 licensed beds.
