University Hospitals announces its intent to acquire one of two of the last independent hospitals in northeast Ohio while consolidation continues in Massachusetts and New York City.
The number of independent hospitals in northeastern Ohio continues to dwindle with news that University Hospitals has signed a letter of intent to acquire Parma Community General Hospital.
Terrence G. Deis, president/CEO of Parma Hospital
"We went through a thorough process and we think we selected the very best partner," says Terrence G. Deis, president/CEO of Parma Hospital. "It was the right combination of commitment to us and the community, a quality footprint, and culture, so we feel pretty good about it. The medical staff maybe even more importantly feels good about it. There is a lot of work to be done between now and a definitive agreement but I feel a lot better about it than I felt I would have even a few months ago."
Healthcare analyst Allan Baumgarten says the UH/Parma deal comes just weeks after UH announced a similar merger with EMH Health in Elyria, which had left Parma as the largest hospital in Cuyahoga County that wasn't already part of UH or Cleveland Clinic.
"UH and Cleveland Clinic have established northeast Ohio as a two-system market and these deals further cement that," Baumgarten said in an email exchange. "Except that Catholic Health Partners (Cincinnati HQ but several hospitals in northern Ohio) has emerged as a possible third system in the region with its partnership with the Summa Hospitals and health plan in Akron."
Although he called Parma "fiercely independent," Deis says it became time to acknowledge the realities that independent hospitals face in a consolidating market.
"We have a shrinking demographic in Northeast Ohio and the competition has stepped up. We just weren't able to compete in that environment. In the last year especially it has been our feeling that it was really inevitable," he explains.
"We have a three-hospital collaborative and last month they announced that they are merging with UH. That left us as one of two of the last independent hospitals in the Northeast Ohio area. If that didn't reek of inevitability, then nothing did."
"For us, the sequester was a big deal. We are a large Medicare facility and a 2% reduction doesn't seem like a lot, but in a decent year 2% is our whole bottom line. It's tough to make that up. The job went from getting more difficult every month to more difficult every week to more difficult every day. The money was needed to attract and retain physicians and the more we were fighting to hang on, the more difficult that became because the first thing people want to know is where are you going to be in five years."
In a media release announcing the acquisition, UH said it would bring investments and new services as a major benefit to the agreement including expanding the presence of UH Rainbow Babies & Children's Hospital that provides neonatal care at Parma Hospital. UH Case Medical Center, an academic medical center, will provide clinical research, and new technology and other innovations.
"Parma Hospital is a vital anchor institution in the communities that they serve," Thomas F. Zenty III, UH's CEO said in a media release. "We are honored to have the opportunity to support and share in their mission to provide the highest quality patient-centered care and to join with them and their physicians in advancing the vision of value-driven, affordable care."
Parma employs 2,000 people and has more than 500 physicians on its medical staff, for a service area that extends beyond its six founding cities of Parma, Parma Heights, Brooklyn, Brooklyn Heights, Seven Hills and North Royalton.
UH employs 18,000 people and its health system includes 10 hospitals and 20 outpatient health centers.
Deis says he isn't sure what his role will be when the deal is finalized later this year or if he will stay on as part of the new hospital management. "That is not going to be my decision, but I would hope that would be the case," he says.
Still, the adjustment will take some getting used to. "Once you are at the top of the organization, whatever sized organization, it is a little bit tough to adjust to not being the last say in things," he says.
Other recent hospital consolidation announcements:
Winchester (MA) Hospital to Affiliate with Lahey Health
Winchester Hospital's board of directors has voted to pursue an affiliation with Lahey Health in a service area that includes northeastern Massachusetts and southern New Hampshire, the two hospitals announced.
"This is an exciting step forward," Kevin Smith, president/CEO of Winchester Hospital said in prepared remarks. "We believe that by joining Lahey Health, Winchester Hospital will be better positioned to continue to fulfill its mission of serving the health needs of our patients. An affiliation with Lahey Health will make Winchester Hospital an even more effective partner in maintaining and improving the health of the communities we serve."
Howard Grant, MD, president/CEO of Lahey Health, said the deal would bring together "two innovative organizations are aligning to create a comprehensive network of locally respected primary care physicians and nationally recognized specialists."
The announcement comes nearly one year after Winchester Hospital formed a steering committee to review potential partners. After completing the affiliation agreement, Winchester Hospital will join the Lahey Health Board of Trustees as part of a shared governance model. The Lahey Health Board of Trustees will have an equal number of representatives with full partnership from Winchester Hospital, the former Northeast Health System and Lahey Hospital & Medical Center Boards of Trustees.
The organization will continue to be called Lahey Health, and Grant will remain as president/CEO.
Winchester Hospital services the northwest suburban Boston region with 20 clinical locations in nine towns throughout northeastern Massachusetts. Winchester Hospital also provides an extensive range of outpatient services as well as integrated home care.
In 2012, Lahey Hospital & Medical Center affiliated with Beverly Hospital, Addison Gilbert Hospital and other Northeast Health System entities to form Lahey Health, a health system that provides a full continuum of integrated health services. Lahey Health includes Lahey Clinic Physician Group with practices in Burlington, Peabody and other locations throughout northeastern Massachusetts and southern New Hampshire; Lahey Health Senior Care and Lahey Health Behavioral Services as well as more than 30 primary care physician practices and multiple outpatient and satellite specialty care facilities.
NY Downtown Hospital Merges with NY-Presbyterian
New York Downtown Hospital has been acquired by New York Presbyterian, the two hospitals announced. Financial terms were not disclosed.
The 180-bed community hospital, now renamed NewYork-Presbyterian/Lower Manhattan Hospital, remains the only hospital south of 14th Street in Manhattan.
Steven J. Corwin, MD, the CEO of NY-Presbyterian said NY-Presbyterian/Lower Manhattan plays a critical role in the healthcare of the community. "As the only acute care hospital serving lower Manhattan, this campus is vital to meeting the healthcare needs of many populations," Corwin said in a media release. "We are working closely with the community, as well as with Weill Cornell Medical College and Weill Cornell physicians, to create a first-class campus that provides the highest quality, most compassionate care and service for patients and their families."
NY-Presbyterian/Lower Manhattan joins the five other campuses of NY-Presbyterian: NewYork-Presbyterian/Weill Cornell Medical Center, NewYork-Presbyterian/Columbia University Medical Center, NewYork-Presbyterian/Morgan Stanley Children's Hospital, NewYork-Presbyterian/The Allen Hospital and NewYork-Presbyterian Hospital/Westchester Division.
Illinois' Edward Hospital and Elmhurst Memorial Finalize Merger
Naperville, IL-based Edward Hospital & Health Services and Elmhurst (IL) Memorial Healthcare announced that they have finalized their merger and made new leadership appointments.
The merger creates one of the larger integrated health systems in the state comprised of three hospitals: Edward, Elmhurst Memorial and Linden Oaks at Edward, with revenues of about $1 billion and more than 50 outpatient locations across a service area of 1.7 million residents. The system employs nearly 7,700 and has more than 1,680 physicians on staff. System naming/branding will be determined and communicated in the coming months, the new system said in a media release.
"This is an historic day for residents of our communities because it brings together and strengthens important community-focused institutions with long histories of serving the western and southwestern suburbs,"Pam Davis, CEO of the new system, said in prepared remarks.
"While Elmhurst Memorial and Edward are already nationally recognized for quality and patient satisfaction, our collaboration will lead to even higher quality, and improved services and efficiencies for our patients as we meet the challenges of healthcare reform."
The new system will work with Illinois Health Partners, which includes DuPage Medical Group and its more than 400 physicians and many independent physicians, to jointly manage the care of more than 100,000 HMO patients in the region.
In May, Mary Lou Mastro was named president/CEO of Elmhurst Memorial Healthcare effective July 1. Gina Sharp was promoted to president of Linden Oaks at Edward, replacing Mastro. Also, Chris Mollet was named system executive vice president/general counsel, and Vince Pryor, was named system executive vice president/CFO.
Try to imagine the ripple effect of punching a $4 billion hole in the economy of a state whose lawmakers refuse federal Medicaid subsidies. It's not just hospital jobs that will disappear. Ancillary support jobs in healthcare and other businesses will wither, too.
Despite the nasty rhetoric, it seemed illogical that 14 states would reject billions of dollars in federal subsidies to pay for the expansion of Medicaid just to make a political point. There was a sense that political leaders in these recalcitrant states were bluffing to save face, but would eventually find a way to expand the program when they realized what they were giving up and who they were hurting.
Wrong!
And now that most state legislatures across the nation have adjourned for the summer with no intention of returning until next year, this is the reality we're left with at least for the next year or so.
A recent RAND study in Health Affairs estimates that the decision not to expand Medicaid in 14 states means that 3.6 million fewer lives will be covered, federal "transfers" to those states will drop by $8.4 billion, and those states' spending for uncompensated care will increase by $1 billion in 2016.
It would be easy enough to write off the decision to reject Medicaid money as just plain dumb. Unfortunately, it's more complicated than that because innocent people are going to be hurt by this ideological line toed in the sand by lawmakers who really ought to know better.
Two predictions: First, the people hurt by the refusal to expand Medicaid will be the sickest, most vulnerable and poorest in these states. And make no mistake about it: People will die when cash-strapped hospitals are forced cut back on services, personnel and access. This is not hyperbole. This must be understood.
David M. Zechman, CEO and President of Ozarks Medical Center
Second: All of these states that are now so boldly rejecting Medicaid expansion money will eventually fold when the public comes to grasp how much this ideology is costing them. It might take a year. It might take longer. Bank on it.
Even vociferous Texas, with close to 30% of its population uninsured, will join the expansion in some way, shape, or form. That much was made clear earlier this month when Dallas-based Tenet Healthcare Corp. acquired Vanguard Health System and its considerable holdings in the Lone Star State.
Like hundreds of his colleagues, David M. Zechman, CEO and President of Ozarks Medical Center, in West Plains, MO, finds himself caught in the middle of an ideological war between state lawmakers who are hostile to the Patient Protection and Affordable Care Act and federal bureaucrats charged with implementing its reforms.
The Missouri General Assembly has declined to expand the Medicaid roles until state Senate and House review panels can issue a report. Zechman says he doesn't see that happening for at least six to nine months. As a result, hospitals in Missouri are bracing for a triple-whammy:
They're the recipients of a 2% reduction in Medicare reimbursements owing to the mandatory cuts brought on by sequestration.
Because their Medicaid roles won't expand, they will continue to treat a significant uninsured and indigent population with little hope of reimbursement.
The disproportionate share payments that are designed to offset charity care costs for hospitals such as OMC are being eliminated on Oct. 1 when the Medicaid expansion goes into effect.
"We are going to get that cut anyway even though Medicaid expansion is not happening in Missouri," Zechman says. "The disproportionate share cut was made and it was anticipated that the hospitals would recoup that money back through expanded Medicaid and the insurance exchanges. The exchanges might get a little back, but we aren't going to get anything from the Medicaid expansion."
It's not just the hospitals and the vulnerable who will be hurt.
A University of Missouri analysis commissioned by the Missouri Hospital Association estimates that the Show Me State will be shown that it could lose more than 9,000 jobs, $1.9 billion in reduced capital investment, or $1.1 billion in cost shifting to private plans with the decision not to expand Medicaid.
Those cuts, which are included in the ACA and the Budget Control Act, combine to reduce Missouri hospital reimbursements by $4 billion through 2019. Another study from Mizzou found that Medicaid expansion would create more than 22,000 jobs.
Try to imagine the ripple effect of punching a $4 billion hole in the state's economy. It's not just hospital jobs. It's ancillary support jobs in healthcare and other businesses. It's less money spent in the supermarket in town, or the local café, or the hardware store, or the car dealership. It's money taken out of circulation that otherwise would have been spent locally.
So how will this all play out?
"Hospitals will reduce some services, there will be jobs eliminated and the worst-case scenario is some hospitals are going to close," Zechman says. "They will be the only providers in those rural communities and generally speaking they are the No. 1 employer in those communities. From an economic perspective it is going to kill those local communities."
Skeptics will point out that the MHA and Zechman have an interest in painting as bleak a picture as possible. That's a fair point. But what if we cut their estimates in half? See what happens when you take $2 billion out of the local economy. The effect is still daunting. Zechman calls the case for Medicaid "overwhelmingly compelling." He's right.
"The state legislators don't want to listen to us because they think the CEOs have a vested interest in this thing. Yeah, we do have a vested interest because we are responsible for making this place work," Zechman says. "But the legislators will perk up when they start hearing from constituents that they have lost their job and/or they can't access services anymore. Then it will start resonating."
"It is highly politicized and that is what is so sad about it. It hurts the most vulnerable and the poor and at the end of the day that is where we'll end up," he says. "I personally lean to the right more than the left, but I am thinking 'my gosh,' sometimes at the end of the day you have to realize this is it. Let's go!' I have to put on my CEO hat and do what's best for the community."
Zechman says resistance to the Medicaid expansion will eventually crumble "but there will be blood on people's hands first."
"They are going to have to live with that," he says. "I am going to do everything I can to save peoples jobs and to save services but there will come a point when we are not going to be able to do that and I know that. I am not trying to blame anybody else. I take total responsibility for what I have to do here. But honestly, there is going to be blood out there before this thing caves and that will be the tragedy of this thing."
Employers have an additional year—until Jan. 1, 2015—before reporting requirements mandated by the Patient Protection and Affordable Care Act go into effect. The unexpected policy decision comes in response to employer concerns about the complexity of data reporting requirements.
In a surprising announcement Tuesday afternoon the Obama administration said it would delay until Jan. 1 2015 a key provision of the Patient Protection and Affordable Care Act that requires mid-sized and large employers to provide health insurance for their workers or pay a fine.
Mark J. Mazur, assistant Secretary for Tax Policy at the U.S. Department of the Treasury, said on a blog posting that the decision to roll back the implementation date for businesses with 50 or more employees was made after "several months" of negotiations with businesses.
"We have heard concerns about the complexity of the requirements and the need for more time to implement them effectively," Mazur said in the blog. "We recognize that the vast majority of businesses that will need to do this reporting already provide health insurance to their workers, and we want to make sure it is easy for others to do so. We have listened to your feedback. And we are taking action."
"The Administration is announcing that it will provide an additional year before the ACA mandatory employer and insurer reporting requirements begin. This is designed to meet two goals. First, it will allow us to consider ways to simplify the new reporting requirements consistent with the law. Second, it will provide time to adapt health coverage and reporting systems while employers are moving toward making health coverage affordable and accessible for their employees. "
As unexpected as news was, the responses from key stakeholders and critics in the healthcare reform debate were predictable.
House Speaker John Boehner, (R-OH) said in prepared remarks that "this announcement means even the Obama administration knows the 'train wreck' will only get worse. I hope the administration recognizes the need to release American families from the mandates of this law as well. This is a clear acknowledgment that the law is unworkable, and it underscores the need to repeal the law and replace it with effective, patient-centered reforms."
Business groups cheered the news.
"We commend the Administration's wise move to delay the employer reporting and penalty obligations under the Affordable Care Act. This one-year delay will provide employers and businesses more time to update their healthcare coverage without threat of arbitrary punishment," said Neil Trautwein, with the National Retail Federation.
"The National Retail Federation has worked hard to engage and educate our diverse membership on the upcoming ACA requirements and consistently and empathetically called on the Administration to delay these specific regulations. We appreciate the Administration's recognition of employer concerns and hope it will allow for greater flexibility in the future."
Robert Zirkelbach, spokesman for America's Health Insurance Plans, said the insurance lobby "appreciates that the administration is being responsive to the concerns employers and insurers have raised about the workability of the reporting requirements related to employer healthcare coverage."
In a separate blog posting Tuesday afternoon, Valerie B. Jarrett, a senior White House advisor, said the administration would also cut red tape and simplify reporting processes for employers. "We have heard the concern that the reporting called for under the law about each worker's access to and enrollment in health insurance requires new data collection systems and coordination," Jarrett wrote.
"So we plan to re-vamp and simplify the reporting process. Some of this detailed reporting may be unnecessary for businesses that more than meet the minimum standards in the law. We will convene employers, insurers, and experts to propose a smarter system and, in the interim, suspend reporting for 2014."
Brian Haile, senior vice president for healthcare policy at Jackson Hewitt tax consultants said the delay should alleviate concerns raised by employers, particularly those with significant seasonal and part-time worker
"The federal approach acknowledges the challenges with implementing a policy that will affect so many employers—and strikes the right balance between speedy implementation and thoughtful policymaking," Haile said.
Haile, in an email exchange with HealthLeaders Media, identified several potential effects of the implementation delay for employers:
Fewer employers may cut employee hours in 2014. This one-year respite may make employers (e.g., restaurant and retail establishments) less likely to reduce employee hours below 30 hours per week.
Many families with children will have an unexpected benefit. For employers who offer employee but not dependent coverage, this one-year delay may also cause employers to postpone any offer of coverage to dependents. Interestingly, this may have a positive effect on such families for two reasons. First, children without an offer of employer-sponsored coverage may be eligible for the Children's Health Insurance Program if they meet the state-specific income and other eligibility requirements. Second, children without an offer of employer coverage may be eligible for the new premium assistance tax credits in 2014 even if their incomes are above the state-specific CHIP limit. Indeed, employers may be more likely to cooperate with enrollment efforts to get uninsured employees and their uninsured dependents covered under various ACA programs because they know with certainty that they will not face a penalty in 2014.
States may face less pressure from business interests to expand Medicaid. Jackson Hewitt had released a report earlier this year estimating that American employers would incur $876 million to $1.3 billion in penalties in 22 states that were refusing to expand their Medicaid programs as contemplated under the ACA. Today's decision effectively removes that penalty liability for 2014. However, employers will continue to face such penalties in 2015 and thereafter in states that do not expand their Medicaid programs.
The Treasury action today addresses anxiety among employers about the lack of final regulations from the IRS. While many employers with large part-time and seasonal employees embraced the flexibility afforded to them by the IRS' proposed approach, they voiced increasingly loud concerns that the IRS had yet to finalize this approach in a final rule. Indeed, the IRS has not publicly pledged to finalize these proposed rules before the major provisions of the ACA take effect in 2014. In an unexpected development late Tuesday, though, the Treasury Department effectively moots this issue for 2014.
Formal guidance from the White House is expected within the next week.
The rate of U.S. births by cesarean section is holding steady at 31%, says the CDC. But "we are seeing an increase in cesareans for longer gestational ages—for full term. That is very disturbing," says the head of a hospital quality watchdog group.
After more than a decade of alarming and persistent growth in cesarean sections, the procedure appears to have leveled off in the past three years, but still is used for nearly one-in-three deliveries, new federal data shows.
According to a report from the Centers for Disease Control and Prevention, the total U.S. cesarean delivery rate reached a high of 32.9% of all births in 2009, rising 60% from 20.7% in 1996. However, since 2009 the rate has held at 31.3%.
Leah Binder, president and CEO of The Leapfrog Group, an employer-supported hospital quality watchdog group, said in an interview that the CDC report contained "good news and bad news."
"The good news is the rate of cesarean sections for gestational age below 39 weeks has been decreasing. So we are seeing fewer and it's consistent with the trend Leapfrog has noted in the reduction of early elective deliveries. That is very positive," Binder says.
"The bad news is we are seeing an increase in cesareans for longer gestational ages, for full term. That is very disturbing. It's part of an overall trend of increased use of cesarean sections for normal births and that trend has obviously been rising significantly since the 1990s from 20% back in 1996 to the current 31%. It is a very steep increase."
The CDC report does not suggest what an acceptable rate of cesarean section births should be, but Binder says the World Health Organization has stated that cesarean section rate should be about 15%.
"It is extremely disturbing to see increases in the rates of cesarean after 39 weeks. It is masked by the overall numbers of cesareans because there has been this successful effort to reduce them at the early stages. They ought to be reduced at all stages," Binder said.
"One-in-three women do not need major abdominal surgery to have a baby. That is not how it works. It doesn't make sense. None of the literature supports it and it suggests that when a pregnant woman walks through the hospital door someone is holding a knife. Women's bodies are built for child birth and we can do a lot better than this."
The CDC study found that:
After 12 years of consecutive increases, the preliminary cesarean delivery rate among singleton births was unchanged from 2009 to 2011 (31.3%).
Cesarean delivery rates decreased more than 5% among births at 38 weeks of gestation, but increased 4% among births at 39 weeks.
Decreases in cesarean delivery rates for births at 38 weeks occurred for non-Hispanic white, non-Hispanic black, and Hispanic women, as well as for all maternal age groups.
Increases in cesarean delivery rates for births at 39 weeks occurred among non-Hispanic white, non-Hispanic black, and Hispanic women, as well as for all maternal age groups.
The cesarean delivery rate at 38 weeks decreased in 30 states; the cesarean delivery rate at 39 weeks increased in 23 states.
Asked for comment, the American College of Obstetricians and Gynecologists did not provide anyone to speak about the report. However, ACOG spun the findings slightly differently and said in a media release that it was "encouraging" that C section births had leveled off since 2009.
"The College believes that its ongoing efforts to reduce non-medically indicated deliveries before 39 weeks' gestation has helped to achieve this plateau," ACOG said.
"The College is also encouraged that the cesarean delivery rate decreased by more than 5% for singleton births at 38 weeks' gestation from 2009 to 2011. This decrease in cesareans occurred for women of all races and maternal ages, and in more than half of all states. However, the encouraging news is offset by data showing the cesarean rate at 39 weeks gestation has increased by 4%. More research is needed to find out the reason(s) for this increase."
Binder says that a recent survey from the Childbirth Connection [PDF], a non-profit maternity care advocacy group, found that only 1% of new mothers said they requested a C section.
"They also found that a lot of women were given C sections or inductions for reasons that are known not to be medically indicated," she says. "For example many women were told that they had big babies. That is not in and of itself an indication for a C section but 80% of those women were either given the induction or a C section. We know that based on that study and other and literature we know that there is a high prevalence of unnecessary C sections and certainly the increase over the last 20 years is a very disturbing phenomenon."
Binder says ACOG has listened to critics and taken some steps to address the overuse of cesareans. "For example, ACOG now does not now automatically recommend a cesarean section when a woman has had a cesarean in the past," she says.
"There has been a major push and frankly Leapfrog was the first domino to push on this. We launched a campaign on early elective deliveries that are scheduled without a medical reason either by C section or induction prior to 39 weeks gestation. That is too early. If you have a delivery at that gestational age, 37 to 39 weeks, babies end up on respirators and in (neo-natal intensive care units) and it's not safe."
Even with the support of the March of Dimes and decades of warnings from ACOG, Binder says the early elective deliveries were occurring "at a very high rate."
"Finally, in 2010 Leapfrog put out rates of early elective deliveries by hospital. That really galvanized things very quickly. We got a lot of attention," Binder says.
"The March of Dimes was very excited by the amount of attention we got for this announcement and they were able to use it to accelerate their own campaign against these deliveries. There has been a real movement around reducing early elective deliveries and these results do reflect that."
The Patient Protection and Affordable Care Act is only now putting a spotlight on the good work that's been going on in community health programs for decades. This week, five hospital-led collaboratives will be recognized for their work.
Rhonda Brown
For all the media coverage the trendy terms "population health" and "community health" have received in the last few months, it may seem like the idea did not exist before the Patient Protection and Affordable Care Act became law three years ago.
It is true that under PPACA healthcare providers are suppose to be weaned away from fee-for-service, volume-based reimbursements and pushed toward value-based, preventative care and shared savings. That will require some significant outreach beyond hospital walls and into the communities that hospitals serve. It is important to remember, however, that hundreds of providers in towns and cities across the country have been doing this outreach for decades before PPACA arrived.
The American Hospital Association on July 27 will present its annual NOVA award to five hospital-led collaboratives that have improved community health. The winning programs are Bangor Beacon Community in Bangor, ME; Hope Clinic and Pharmacy in Danville, KY; Free Preventive Screenings Program in Vincennes, IN; Chippewa Health Improvement Partnership in Chippewa Falls, WI; and Core Health Program of Healthier Communities in Grand Rapids, MI.
Rhonda Brown, director of the Chippewa Health Improvement Partnership, says the program has flourished since its founding in 1994 because of the "collaborative spirit" within the community.
"You have to be able to get out and get engaged with the community organizations, the agencies. You need to do that at a really grassroots level. You need to talk to the people that are impacted by the programs that you try to put in place," Brown says. "We can guess, as professionals, all we want about what it is that people need. But if we don't ask them, we are not going to be successful."
CHIP monitors the health, environmental, social and economic needs of people of all ages. Working on a shoestring budget and with a lot of volunteers and community support, the AHA says that the program "has successfully established a federally qualified oral healthcare center, provided automated external defibrillators in public venues and established an open door clinic that offers free medical and mental healthcare.
CHIP has successfully improved food security in the area and increased community awareness of sweetened beverages as part of its goal to lower childhood obesity. CHIP directed a community-wide falls prevention program for the elderly in addition to advance directive education and end of life planning to name a few. CHIP has also been involved with local and international mission activities. St. Joseph's Hospital is the primary funding source for CHIP although local, state and federal grant monies are actively sought and successfully secured."
Brown says CHIP was able to make this happen because it remains focused, inclusive, and structured but not rigid. All of this is accomplished with a budget of around $150,000 and a tiny staff.
"My 'staff' is me, and just recently the hospital was able to give me a half-time staff person," Brown says. "As much as we hate to think about it, you have to keep sustainability in mind. You have to be creative. You have to create an atmosphere of acceptance. You have to be open to other people's ideas and to their creativity and allow anybody and everybody who wants to be a part of it. Everybody has a stake in this game."
"When I started, my budget was probably $30,000, which is like next to nothing, but you can do a lot of stuff on a very small budget if you have community support. A lot of it has to do with how your staff is able to communicate with and network with other people. That means establishing good relationships and partnerships with the other agencies and organizations in our community. You have to nurture those relationships and give and take. When someone calls and needs me to be on a committee, I try to do that even if I don't have any extra time. If I do that, then they are much more likely to help me out." Brown says it's hard to estimate an exact return on investment for the various services CHIP offers. "We started providing free mental health services for patients that are at free clinics that we helped found along with their community agencies and individuals," she says.
"Since June 2011 we have provided 627 counseling sessions free to people in our community. Those are individuals that probably would not be seen anywhere else. So it is hard to put a price tag on what that has meant for those people but I think it is safe to say that we probably made a pretty huge impact by putting that program together."
Good Samaritan Hospital
Good Samaritan Hospital in Vincennes, IN, is another NOVA winner and its Community Health Services preventive health outreach program offers free health screenings for a 10-county areas.
Sandra Ruppel Hatton
"We wanted to make sure that instead of just expecting people to come on the hospital campus to receive preventative health screenings or education as part of the discharge planning process that we actually took the screenings and the information to the communities we serve," says Sandra Ruppel Hatton, director of Marketing and Community Health at Good Samaritan.
"Since we are a very rural area we wanted to make sure we took it to the areas that were farther away from a healthcare facility where it might be difficult for them to get to a healthcare screenings, or healthcare period."
AHA noted that Good Samaritan nurses "work within the community to provide health-related education and screenings ranging from blood pressure checks to lipid profiles. Collaborative partners provide the space necessary to see patients and include senior and community centers, Goodwill and Salvation Army facilities, housing authorities, churches, farmers markets, parks departments, YMCA and other not–for–profit sites.
Screening results are shared with the individual and their physicians and appropriate follow?up and treatment referrals are arranged. The program has provided more than 220,000 free screening over 10 years." The program has also gone into Knox County schools to teach its "Fit Kids" obesity and nutrition classes for third, fifth, seventh and ninth graders.
Ruppel Hatton says CHS could not truly be called a community health program if it didn't actively go out into the community it serves to understand what care people need and how best to delivery that care.
"We have said that that is our role as a hospital. We have taken that stance for years—that we should set the standard for healthcare and be the leader in healthcare and set the standard on lifestyle," she says. "We could not perform these services if we didn't collaborate with the community centers, libraries, farmers markets, farm preview shows, Ag Days—those events that people come to in rural communities."
Like CHIP, Ruppel Hatton says CHS operates on a shoestring budget, a tiny staff, and a lot of volunteers. Several retired nurses work part-time for the program, using their own vehicles to drive to these screening events. Ruppel Hatton says these nurses are highly motivated because they can see the positive effect they're having on their fellow citizens.
"I like to remind our nurses that you do save lives," Ruppel Hatton says. "We had a woman who was in total renal failure and had no idea. We caught a guy who was 41-year old on his way to eating a Pronto Pup. We told him you don't need that. Get your cholesterol checked. Come to find out he had prostate cancer in this 40s. There was the truck driver we found at Old Oaken Days who had colorectal cancer and he didn't know it. They do save lives."
[Here's a quick overview that AHA provided for the three other NOVA winners. Space considerations kept me from speaking with the folks who run these programs, but I hope to chat with them in the coming weeks and months. Congratulations to all the winners.]
Core Health Program of Healthier Communities
Spectrum Health – Grand Rapids, MI.
The Core Health Program of Healthier Communities seeks to improve the health of underserved adults with chronic disease, remove barriers to care, teach self?management skills and work collaboratively within a continuum of care to improve adherence to medication regimens and dietary requirements and to ensure patients receive follow?up care such flu shots, eye exams and foot care.
The services are provided using a cost?efficient approach to chronic disease management by reducing health care costs when compared to conventional approaches for managing chronic diseases. A registered nurse and community health worker team up to provide home visitation services to work with the patient to improve clinical and behavioral outcomes through motivational interviewing, disease management and cultural sensitivity.
Caregivers assist in having a patient assigned to a primary care provider should the patient not have one. The voluntary program extends for 12 months. Collaborative partners include federally qualified health centers, insurers, community centers, food pantries, primary care providers, including the Visiting Nurses Association and other hospitals.
Bangor Beacon Community
EMHS – Brewer, ME St. Joseph Healthcare – Bangor, ME
The 12 partners of the Bangor Beacon Community worked to improve the health of chronically ill people in the Bangor region by using health information technology to ensure better patient care coordination. The goal of the collaboration was to reduce variation in care delivery, improve care quality and alleviate high use of emergency departments and hospitals by chronically-ill patients with symptoms and conditions that could be addressed more appropriately in primary care settings.
The program led six clinical interventions focused on patients with diabetes, cardiovascular disease, chronic obstructive pulmonary disease (COPD), and asthma and a community initiative on immunization, including sharing immunization data among providers. Nurse care managers in each primary care practice worked with high-risk patients. The program's goals, successes and collaborations continue through a newly created accountable care organization.
Hope Clinic and Pharmacy
Ephraim McDowell Health – Danville, KY
Established in 2006, the Hope Clinic and Pharmacy serves low?income, uninsured and chronically ill patients by providing access to care for the people of Boyle, Casey, Garrard, Lincoln, Mercer and Washington counties. Advanced practice registered nurses (APRNs) lead the clinic's efforts to provide preventive care and care management, as well as access to prescriptions and medications with the goals of reducing reliance on emergency department care and improving health status across the region. In addition to part?time paid APRNs, volunteers and physicians donate services including health education and counseling, specialist referrals and securing medical procedures at no charge to patients. In 2011, the clinic had 223 active patients and the hospital provided 618 free procedures. Collaborative partners include Ephraim McDowell Health, Ephraim McDowell Health Care Foundation, the Presbyterian Church of Danville, The Salvation Army, United Way and the Boyle County Health Department.
The deal, when it closes, will give Tenet a footprint in 30 markets across 16 states. Charlie Martin, Vanguard's founder, chairman and CEO, will join Tenet's board of directors, and Keith Pitts, Vanguard's vice chairman, will serve Tenet as vice chairman.
Trevor Fetter, president and CEO of Tenet
Tenet Healthcare Corp. jolted the hospital industry this week with the surprise announcement that it will acquire smaller rival Vanguard Health System in a deal the two for-profit hospitals chains valued at $4.3 billion.
This latest high-profile consolidation in the hospital industry is expected to be finalized by the end of this year, just as millions of people gain health insurance under the Patient Protection and Affordable Care Act.
"The acquisition of Vanguard significantly increases our scale and diversifies our geographic footprint increasing our hospital and outpatient facilities by 61% and 25% respectively," Trevor Fetter, president and CEO of Dallas-based Tenet said during a Monday conference call with analysts.
Fetter said that with the acquisition of Vanguard, Tenet "will go from 49 hospitals and 126 outpatient centers serving 24 markets across 11 states to 79 hospitals and 157 outpatient centers in 30 markets across 16 states."
"This acquisition will create a broader platform across which we can apply our skills is revenue cycle services, cost management, and quality improvement as well as our clinical integration and network development strategies," he says.
"Significantly, it enhances our growth opportunities. Tenet's strategic priorities have always placed value on the creation of leadership positions in our markets. We will now be No. 1 or No. 2 in 19 key markets. It is important to note that Tenet and Vanguard serve totally distinct markets with essentially no overlap. We are excited to add clear leadership positions it the growing and highly attractive San Antonio and South Texas markets, two of the crown jewels in Vanguard's portfolio."
Under the definitive agreement reached by the two chains, Tenet will pay $21 per share in the all-cash transaction, which includes the assumption of $2.5 billion in Vanguard debt, which Tenet will refinance. The $21-a-share payout represents a premium of 70% and is the highest price for the stock since Vanguard's initial public offering in 2011.
Tenet says it has already identified at least $100 million to $200 million annually in savings with the acquisition. The deal was unanimously approved by the boards at both chains,
Investors responded favorably to the news. On an otherwise dour day on Wall Street, Nashville-based Vanguard saw its share prices soar by more than 67% for a 52-week high before closing at $20.70, just below the Tenet payout. Tenet shares rose 4.5% and closed at $43.73.
Analysts were caught off guard.
"Most of the M&A talk lately has been around names like HMA, so this was a surprise," said Joe France, healthcare analyst with Cantor Fitzgerald.
France says Vanguard was not necessarily on the radar screens for an acquisition because of its 2010 acquisition of Detroit Medical Center. "The appetite for an acquisition that includes that, which is about one third of their revenue, is fairly limited," he said.
"For a company like Tenet which has large urban medical centers it's a promising transaction because if it is successful—and there are reasons to believe that it has already been successful—then they can replicate that in other markets across the country and that opens up a whole new opportunity. This is something like an HCA might do in Kansas City or Colorado, but it is not something that has been done by most of the other hospital chains. But Tenet has a lot of experience historically in taking large hospitals and making them successful. Obviously Detroit Medical Center is a much bigger undertaking but I think they believe they can do it or they wouldn't have made this offer."
Fetter, in an interview Monday with CNBC, called Detroit "an interesting market obviously."
"It is a three-way tie for No. 1 in market area and Vanguard is very well positioned in Detroit. They have high-quality assets with a great reputation. I think post the transaction revenues from Detroit will only be about 11% of Tenet's combined revenues, so we see big opportunities there," he said.
"They have made very substantial investments that in the market that have yet to generate earnings, hospitals under construction and expansion there. We're looking forward to being state of Michigan and operators in Detroit."
When the deal closes, Charlie Martin, Vanguard's founder, chairman and CEO, will join Tenet's board of directors, and Keith Pitts, Vanguard's vice chairman, will serve Tenet as vice chairman. Martin has a 4.1% stake in Vanguard, which was founded in 1997. "We see the opportunity to recruit and retain Vanguard's operational and corporate talent as a real plus in this acquisition and we will maintain a presence in Nashville," Fetter said in the conference call.
Joe Lupica, chairman Denver-based Newpoint Healthcare Advisors, says the roles at Tenet for Martin and Pitts will not be mere sinecure.
"Charlie is nobody's prop. Charlie is one of the most feverishly brilliant thinkers in the business," Lupica says. "Keith is a brilliant operator and relationship builder with communities. That is important in this industry. If you are coming to town and you are a bad apple, you are going to have a hard time convincing the community to entrust their hospital to you. The question is, are they going to stay."
Adam Powell, a healthcare economist and president of Boston-based Payer+Provider Syndicate, calls the acquisition "a clear win for Vanguard investors; time will tell whether it will be equally advantageous for Tenet investors."
"The additional scale and experience with business outsourcing offered by Tenet has the potential to lower costs within the Vanguard system," Powell says. "The two companies have a partial geographic overlap, so the merger offers both geographic expansion, and in some cases, greater market power."
The acquisition is expected to be finalized by the end of 2013, just as millions of people are expected to become insured either through Medicaid expansion or health insurance exchanges provided under the Patient Protection and Affordable Care Act.
With that in mind, analyst Allan Baumgarten said in an email exchange that Vanguard was an appealing takeover target because of its "broader experience and assets in operating managed care plans and Accountable Care Organizations."
"It is unique among investor-owned provider systems in that regard," Baumgarten says. "Vanguard has large Medicaid (Phoenix Health Plan) and Medicare (Abrazo Advantage Health Plan) HMOs in the Phoenix area. In 2012, it acquired ProCare in Detroit, a small Medicaid HMO (less than 2,200 members), with an eye toward growing its share of the Michigan market for Medicaid managed care. Further, two Vanguard divisions are in the forefront of Medicare ACO development. In Michigan, the Vanguard-owned Detroit Medical Center formed Michigan Pioneer ACO, one of the original class of risk-sharing ACOs. In Illinois, some of the Vanguard hospitals and their physicians have established Chicago Health System, a Medicare shared savings program ACO."
Tenet management apparently is not overly concerned with Texas Gov. Rick Perry's bar-the-door refusal to expand Medicaid coverage. "The State of Texas has roughly 30% of its residents not covered by insurance today," Fetter told CNBC.
"Eventually we believe those residents will be covered by one form of insurance or another, and that will create substantial growth opportunities for hospital operators in Texas and very materially Vanguard's portfolio is located in the high growing markets of San Antonio and South Texas, particularly Harlingen and Brownsville. It is very appealing to us. We have a strong presence in Texas already, and together we will nearly double our revenues in the state."
Fetter told CNBC that the Vanguard acquisition "marks a turning point for the company in which we'll be more aggressive in acquisitions."
"We have been building our outpatient portfolio. We have doubled that through acquisitions in the last few years, and we have been building our services portfolio through acquisitions," Fetter said. "This is the first big acquisition we have done in a very long time in acute care hospitals. It will not be the last. One of the skills that Vanguard brings to the table is that they're known as a very good acquirer and partner to not-for-profit health systems and so I look forward to expanded acquisition pipeline in the acute care business."
In two reports examining the status of health insurance exchanges, the U.S. Government Accountability Office raises concerns that "much remains to be accomplished" by the Oct. 1 enrollment date.
The federal government's watchdog agency is raising concerns that the health insurance exchanges created under the Patient Protection and Affordable Care Act will not be operational by the start of the October 1 enrollment period.
The Government Accountability Office issued two reports this month. One report examined the status of the Centers for Medicare and Medicaid Services' efforts to establish federally facilitated health insurance exchanges. The second report examines CMS and state efforts to establish the insurance exchanges for small businesses.
Both reports reach the same conclusions. "Much progress has been made, but much remains to be accomplished within a relatively short amount of time," the GAO said in both reports.
"CMS's timelines provide a roadmap to completion; however, factors such as the still-evolving scope of CMS's required activities in each state and the many activities yet to be performed—some close to the start of enrollment—suggest a potential for challenges going forward," GAO said in Status of CMS Efforts to Establish Federally Facilitated Health Insurance Exchanges.
"And while the missed interim deadlines may not affect implementation, additional missed deadlines closer to the start of enrollment could do so. CMS recently completed risk assessments and plans for mitigating risks associated with the data hub, and is also working on strategies to address state preparedness contingencies. Whether these efforts will assure the timely and smooth implementation of the exchanges by October 2013 cannot yet be determined."
In a June 6 letter responding to the GAO concerns, Jim R. Esquea, assistant secretary for legislation for the Department of Health and Human Services, assured the auditors that "on Oct. 1, 2013, a health insurance marketplace will be open and functioning in every state."
CMS is supposed to operate "federally facilitated exchanges" in 34 states that have elected not to run state-based exchanges in 2014. Fifteen of those 34 states are expected to help CMS operate their FFEs in one capacity or another, but GAO says that exact role continues to evolve, even with the open enrollment period looming only four months from now. GAO noted that CMS approved states' exchange arrangements on the condition that the states actually do what they said they were going to do to make the exchanges operational. However, it's not clear how that process is going. If states don't meet their part of the deal, CMS said it would step in and carry out the necessary steps to make the exchanges operational.
"CMS is also depending on the states to implement specific FFE exchange functions, and CMS data show that many state activities remained to be completed and some were behind schedule," GAO said.
GAO says many other provisions that are the responsibility of CMS remain to be completed and some were behind schedule, especially functions related to "core exchange functional areas of eligibility and enrollment, plan management, and consumer assistance."
"While CMS has met project schedules, several critical tasks, such as final testing with federal and state partners, remain to be completed. For plan management, CMS must review and certify the qualified health plans (QHPs) that will be offered in the FFEs. Though the system used to submit applications for QHP certification was operational during the anticipated time frame, several key tasks regarding plan management, including certification of QHPs and inclusion of QHP information on the exchange websites, remain to be completed. In the case of consumer assistance, for example, funding awards for Navigators--a key consumer assistance program--have been delayed by about two months, which has delayed training and other activities," GAO said.
The wording of the conclusions in the second report—Status of Federal and State Efforts to Establish Health Insurance Exchanges—was virtually identical to that of the first report, but added that "in commenting on a draft of this report, HHS emphasized the progress it has made in establishing exchanges, and expressed its confidence that exchanges will be open and functioning in every state by Oct. 1, 2013."
The Small Business Health Options Program (SHOP) was approved in 18 states, and for 17 states that operate health insurance exchanges for individuals. CMS will operate a federally facilitated SHOP and an individual exchange in the remaining states. As with the status of the overall FFE programs and their relationships with particular states, the GAO study of SHOP programs found them in varied stages of evolution.
"For example, funding awards and development of a training curriculum for a key program that will provide outreach and enrollment assistance to small employers and employees have been delayed by about two months," GAO found. "Many key activities remained to be completed—some scheduled for near the start of enrollment in October 2013—and, as of May 2013, states were behind schedule in completing some key activities. In particular, about 44% of the key activities CMS initially targeted for completion by March 31 were behind schedule, although CMS reported that it had revised many target dates and other delays were not expected to affect exchange operations."
In his identical responses to both GAO reports, HHS' Esquea touted the "tremendous progress" that has been made in the three years since the PPACA became law.
"Earlier this year we successfully administered the qualified health plan submission process for the federally facilitated Marketplace. We published the final single streamlined application. We have announced several grant and contract programs that provide consumer assistance functions. We are in the final stages of finalizing and testing the IT infrastructure that will support the application and enrollment process," Esquea said in his letter.
"HHS is extremely confident that on Oct. 1 the marketplace will open on schedule and millions of Americans will have access to affordable quality health insurance."
Healthcare industry leaders discuss the shortage of staff with information technology expertise, the impact on hospitals and health systems, and what can be done to address the situation.
This article originally appeared in the June issue of HealthLeaders magazine.
The lack of IT staff with expertise represents the top challenge leaders face regarding their IT group.
Where in the IT group are you finding these shortages, what is the effect on the organization, and what can leaders do to address that?
Jack Kolosky
Executive vice president and COO
H. Lee Moffitt Cancer Center and Research Institute
Tampa
On finding the right people: Even with a higher-than-expected unemployment rate, the issue of trying to find really qualified people who understand the program and who are willing to stick with it through all the trials and tribulations and difficulties in implementations is challenging.
A staffing problem across many industries: We thought we might have been unique in healthcare, but we spoke with one of our board members who runs a major corporation and she was saying the same thing about her business. We all agree that information technology and the usage of it—being able to mine the data—is critically important to our businesses. But we really need to have our schools and our infrastructure—be it government or whatever else—step up and help accelerate the idea of recruiting people into this field.
On building partnerships: We are looking at partnerships with some of the major schools, much as we did in nursing and other areas where we had critical shortages, about helping us to recruit and continually train new qualified people.
On the effect of IT staff shortages: To be perfectly frank, I wish we were able to turn out more people who are qualified and can think outside the box and be a little more innovative. We have a great group here. We just don't have enough of them. We obviously get the job done but it seems to take us longer or we can't do some of the innovative things we'd like to do.
Sam J.W. Romeo, MD CEO
Tower Health & Wellness Center
Turlock, Calif.
The evolution of healthcare technology is behind the curve. It will be self correcting for two reasons: There are an increasing number of physicians who are becoming technical themselves and there are technical people who are beginning to learn the physicians' language.
The biggest barrier is we have third-party and other people including Medicare that basically are saying these are the priorities and they distract us away from the patients and toward the payer mechanisms. That is important because if you don't get paid you can't take care of patients. But it seems like we are putting a whole bunch of balls in the air at the same time and we don't have enough technical people to be able to communicate across those bridges to be able to do it with any efficiency.
We are fixing it. I'm an old man. I am a family doctor for 50 years but I have six children, five of whom as physicians are working on this and who are electronically savvy and much of the culture is different. That is a big transformation. They are head over heels involved in creating software that will support documentation of what happens in the examining room so we will have a relational data base so we can do some things that are meaningful in terms of quality and not just meaningful in terms of payment.
Deborah Gaspar
Chief Nursing Officer
Memorial Hospital Sweetwater County
Rock Springs, Wyo.
We can't recruit skilled health system administrators who understand how the programs interconnect and how they connect to server capacity and how they connect to wireless capacity; how they are upgraded becomes an issue. This needs to be addressed industrywide
Nursing has always had to deal with shortages and we've learned how to train our own and that is what is going to have to happen in healthcare IT.
The IT people are pretty frustrated about it, too, because so many of the IT people don't have leadership abilities. They don't know how to problem solve. And the people they report to in the organizations often don't have competencies doing that problem solving. So I do think there are going to be more clinical people who delve into that role because it's going to be necessary.
We have a couple of RNs who built our clinical system. They are both in their 20s and they are much more competent and capable at that stuff than I am. I can do the clinical background and the clinical standards and the high-level stuff and they do the technical skills-based stuff. We're creating our own solutions. You have to survive so you do what you have to. Give people the abilities because there are people out there who want to do this stuff. You have to be patient and willing to groom them.
Glenn McElroy
Executive Director
Columbia (Mo.) Surgical Associates Inc.
It is pretty easy to find the guy who can handle the complex hardware networks within the office. However, the complex software—and the nuances and constant updates that are associated with each, often unfixing things you fixed last week—gives you constant new challenges, and finding someone who has a handle on both hardware and EMR is very difficult. I am not sure I know anybody who is really happy with their EMR and practice management products as they interrelate.
It is self-correcting somewhat with the younger doctors coming up, but in the short term we aren't going to outgrow it. It is the switchover from the texted base to a data-based EMR that is throwing everybody for a loop. That consternation is going to lessen as more of the old guard who are used to dictating verbal notes either retire or give up and get on a computer and figure out how to make it work. The younger docs coming up are very familiar with messing with computers and can't think of any other way to do it.
A federal court found the action of a NC dental board to restrict discount teeth-whitening procedures was intended to limit competition, and a legal expert says the ruling could affect other oversight boards.
A federal appeals court ruling this month that affirmed antitrust complaints against a state dentistry board in North Carolina could have broader implications for other state regulatory boards monitoring professional activities, including those of physicians and hospitals.
The U.S. Court of Appeals for the Fourth Circuit this month rejected the North Carolina State Board of Dental Examiners' claims that it was exempted from federal antitrust laws under the "state action" doctrine.
The dental board had been the subject of an administrative complaint by the Federal Trade Commission in 2010 for violations of the FTC Act after the board banned non-dentists operating in mall kiosks and other venues from performing discount teeth-whitening procedures. A federal district court rejected the board's initial complaint, and the appeals court this month sided with the FTC and noted that the dental examiners board was composed of dentists who stood to gain financially by restricting the practice.
"At the end of the day, this case is about a state board run by private actors in the marketplace taking action outside of the procedures mandated by state law to expel a competitor from the market," the appeals court said in its ruling.
Jay Levine, a healthcare antitrust attorney with the Washington, D.C.–based firm of Bradley Arant Boult Cummings LLP, says the ruling has broader implications for all state regulatory boards that attempt to limit competition.
"What the board was doing here was essentially restricting competition by sending cease-and-desist letters to purveyors of teeth-whitening services saying 'what you are doing is illegal' and thereby driving them from the market, which all inured to these dentists' competitive benefit," Levine says.
"The essential ruling of the Fourth Circuit was affirming the FTC's complaint that because the North Carolina dental board was comprised for the most part of practicing dentists who were elected by practicing dentists , they were considered a private actor and not a governmental entity," Levine says. "Therefore they needed to meet both prongs of the Midcal test, which are a clearly articulated state policy to displace competition plus active supervision of the state over the private parties' conduct."
"If the board is not acting in a collusive manner then they may be entitled to some other protection … because Section 1 of the Sherman Act requires that there be concerted activities between two economic actors. The Fourth Circuit rejected that line of reasoning in the North Carolina dental case because it essentially said 'here you have a bunch of different actors with different economic interests engaging in conduct designed to promote their individual economic interests.' "
Levine says state oversight boards with concerns about their immunity from antitrust complaints should probably review how they are comprised and how they do business.
"From an infrastructure perspective you have to look at whether there is active state supervision over your activity," he says. "If there is active state supervision where there is a state governing body that actually reviews your decision such that your decisions can be appropriately attributed to the state, then you are going to satisfy both prongs of the Midcal test and you are going to be immune from the antitrust laws."
"But if your board doesn't have active supervision from the state, then you need to understand that your conduct may not be immune from the antitrust laws and you may have to look at how you are constituted and discuss whether you need to go back to the legislature and either have them draft legislation putting in a regime that does engage in active state supervision or possibly reformulate how your board is constituted so you are not deemed a private party."
Levine says it is also important that regulatory boards "understand what conduct you are engaging in and whether it can fairly be called anticompetitive."
"Not every activity of the board is going to restrict competition," he says. "You really only have to worry about conduct that can be said [to be] where you are foreclosing or otherwise eliminating or reducing competition. In those cases if you really want to feel comfortable about it, you need to make sure that you are not considered a private party because your board composition is made, for example, straight from the governor or is not comprised of people who are essentially practicing in the field or that there is a regime of active state supervision."
Theories abound as to why young physicians won't practice in rural areas. But the key reason why young medical doctors don't fill these much-needed roles readily is a lack of accountability in publicly funded Graduate Medical Education programs, researchers suggest.
A new round of metrics doesn't bode well for rural healthcare.
The U.S. Census for 2010 says that one in five people —19.3% of the population, about 59.4 million people—live in rural America. Unfortunately, a new report this month from George Washington University School of Public Health and Health Services says that only 4.8% of new physicians plan to establish a practice in rural areas, despite the critical need.
Clearly there is a disconnect between supply and demand. This is hardly news to most rural healthcare professionals, researchers on the topic, or physician recruiters serving rural areas. It's a topic that's been predicted and discussed for decades. That's what makes this persistent shortage all the more vexing. We know what the problem is but we can't fix it.
"I can't say we were terribly surprised but it does definitely confirm what a lot of us suspected. When you see the actual numbers it is hard not to be a little shocked and disturbed," says Candice Chen, MD, MPH, an assistant research professor of health policy at SPHHS, and a lead author of the study, which appeared this month in Academic Medicine.
Candice Chen, MD
Theories abound as to why young physicians won't practice in rural areas: less money, horribly long or erratic working hours, massive medical school debts to repay, a lack of cultural diversity and other social chasms with the populations they serve, practicing in isolation, a lack of professional support, and generally poorer schools for their children and fewer career options for spouses, to name a few.
The failures continue despite the efforts and financial incentives by the federal and state governments to encourage medical students and residents to practice in underserved areas both rural and urban. The key reason why young physicians don't take up these obvious and dire needs is a lack of accountability in publicly funded Graduate Medical Education programs, researchers suggest.
Chen and her colleagues studied the career paths of 8,977 physicians who had graduated from 759 medical residency sites from 2006 to 2008. The researchers analyzed data to find out where these new physicians ended up practicing three to five years after graduation. They found that overall only 25.2% of the physicians in this study worked as primary care physicians.
Chen says this number likely too high because it includes hospitalists. The researchers found that 198 of 759 institutions produced no rural physicians during the study period. And 283 institutions graduated no doctors practicing in the Federally Qualified Health Centers that serve low-income or destitute patients in underserved urban and rural areas.
The study's findings are blunt: GME operates on public money—nearly $10 billion in funds from the Medicare program and another $3 billion from Medicaid—but apparently the nation's teaching hospitals can't address physician shortages that were identified and anticipated decades ago.
The problem is not just in rural and underserved areas. Chen says GME institutions produce primary care physicians at an "abysmally low" rate. This failure by a taxpayer funded program to address a dire public need is occurring despite the full knowledge that the need for primary care physicians will dramatically increase in the coming years as more Americans gain health insurance coverage under the Patient Protection and Affordable Care Act.
"If residency programs do not ramp up the training of these physicians, the shortage in primary care, especially in remote areas, will get worse," Chen says. "The study's findings raise questions about whether federally funded GME institutions are meeting the nation's need for more primary care physicians."
"Right now with the Medicare money that goes for GME there is very little requirement around that money other than that you train and report that you train 'X' number of residents," Chen says.
"There is nothing that says we need more primary care doctors or other kinds of doctors. General surgery is another area where a lot of communities are struggling. There is nothing in the payment that says you need to produce these kinds of doctors or produce doctors who are going into certain areas to serve the need that America has."
Consider these findings from Chen and her colleagues:
The top 20 primary care producers in this study trained 1,658 primary care doctors out of a total of 4,044 or 41%. These sites received just $292 million in GME funding.
The bottom 20 programs produced only 684 primary care graduates out of 10,937 or 6.3%. These sites received $842 million in GME payments—an amount that reflects not a dedication to training doctors in primary care but in churning out highly paid specialists who typically practice in big cities or the suburbs.
Almost two-thirds of the nearly $10 billion in Medicare funding for GME annually goes to 200 hospitals—and those sites perform poorly when it comes to producing primary care doctors.
Chen and her colleagues say policymakers should examine the skewed incentives that have led to the ongoing primary care crisis and the lack of physicians in underserved areas, and develop a more accountable GME system. Of course there are other nagging issues out there that disincentivize primary care, especially the huge compensation gap between primary care physicians and their specialist colleagues.
"GME reform alone will not be the thing that magically fixes the system," Chen says. "But there is a definitely a sense and there is research evidence out there that shows that GME residency training programs can do things that would increase the likelihood of people going into primary care and underserved areas. Where we locate our residency programs and the exposure to different kinds of mentors in GME and the exposure to positive experiences in rural and underserved areas, those do make a difference to trainees."
Chen believes the failure of GME to respond to glaring shortage of primary care physicians will prompt that review.
"The fact remains that there is no accountability in the system currently," she says. "Even with the system the way it is, [could you] layer in an accountability system could that make the difference? It could depending upon what it looks like. There are definitely things going on now. People are looking at GME and they're interested in how you can start to align it with producing the physicians that we ultimately need."
Simply building more accountability into GME and ignoring other issues such as compensation won't remove all the hurdles that keep physicians away from rural America. But it's a good start and it's long overdue.