In our annual Industry Survey, a majority of healthcare leaders cited organized labor a threat, placing it among their organization's top three concerns.
What is the nature of that threat and what is the best way for leaders to address this?
Wright Lassiter III
CEO
Alameda County Medical Center
Oakland, Calif.
On Creating a Dialogue: Almost 90% of our employees are represented by unions. When I arrived at ACMC it was contentious largely because there wasn't good communication. In the organization oftentimes you've had a lot of financial strife, and leadership turnover doesn't allow leadership to sit down with unions and develop a partnership. So in our case we have pretty positive relationships with the majority of our labor unions and they understand that the purpose of the partnership isn't for them to threaten us or force us to do things that aren't economically viable or to be a barrier to creating a culture of excellence. They are really there to partner.
You walk around our organization now and look at the boards for labor unions and you will see things like "Working on a partnership to be an employer of choice" instead of things like "Management is evil" or "Down with Wright Lassiter!"
On Building a Relationship: In the past they weren't always sure that some of the stories were as dire as they actually were. We used the phrase, "We are going to open the kimono and you guys can look at what you want to look at." And we are going to include union leadership on committees to fix things. We had conversations about things that weren't comfortable for either party at times, but I really believe it was a large part about the sincerity and transparency and open dialogue and not being afraid to say "impasse." Let's just stop bickering over this thing because we aren't going to resolve it, so this is how we are going to approach it with a little bit of give-and-take without giving the farm away
John Haupert
President and CEO
Grady Health System
Atlanta
Reduced reimbursements, healthcare reform, and the future role of safety-net hospitals rank way higher for us than do issues related to organized labor. Southern states are big into right to work and are not very organized labor-friendly. I prefer that. It's not that I am anti-union but I don't want to work in an environment where I have to go through a representative to interact with employees who are providing care to the patients. That isn't good for patient care or safety or workforce relationships and I personally prefer not to work in that environment.
The best defense is a good offense. We all as employers—regardless of if it is healthcare or any other industry—have a huge obligation to work to create a highly engaged and committed workforce. If you go through the effort of doing that it creates a much better organization. You fend off the desire of employees to reach out to unions. In organizations where senior leaders don't pay attention to what the front line is telling them about working conditions and the quality of frontline and midlevel leaders, benefits, pay, if you turn a deaf ear to that, you really open up the window for employees to engage unions in a discussion.
No. 1 is making sure you hear the voice of the employee.
Britt Berrett, PhD, FACHE
President
Texas Health Presbyterian Hospital–Dallas
The threat is probably regional in nature. Unions are very limited in the entire state of Texas but I was very familiar with unions when I was a CEO in the Sharp HealthCare system in San Diego. I'm always concerned when there is a need for a third-party intermediary, such as a union, to represent the interests of members of your team. To have a third-party voice for those professionals seems unseemly.
There is a strong interest by unions to penetrate healthcare because it is filled with professionals who have not been unionized in the past. Healthcare is almost a $3 trillion industry and healthcare professionals have an ability to move from one organization to another almost seamlessly.
Also healthcare is in a constant state of change. Unions represent more static industries. We are nimble. The nurse requirements of today will be significantly different in 36 months from today. To demand static conditions of employment is unreasonable.
One of our key performance indicators is based on our ability to retain top performers. We measure that every month by department. Yesterday I had a lengthy conversation on why one of the clerical staff left. Yes, really. We are all interdependent and if we have clerical staff who don't feel engaged, I have to know.
Joseph Pepe, MD
President and CEO
Catholic Medical Center
Manchester, N.H.
It's a top threat but I wouldn't put it in the Top 3. Most of the time you can't see this threat. But I tell my senior staff to rest assured that it is always there, hiding in the shadows and ready to pounce if the timing is right. It's best to be proactive and do what's right for employees all the time and not just when the threat comes out of the shadows.
The most important key is open and frequent communication. I have open forums with employees every month. I meet with representatives of the various departments every other month and I meet with the physicians' cabinet every month. It is important in these meetings to make them feel safe to ask questions and I encourage them to do so.
Respect is another key. This starts at the top with the CEO and senior leaders treating everyone with respect. I expect them to respect not only their supervisors and patients but also to respect each other. This is a place that is opposite from a toxic environment.
It's important to be visible. I round on the floors once a week and I encourage my senior staff to do the same. When there is a crisis, I go there either right away or shortly after that to show my support and ask if everyone is okay. Just being visible shows that you care.
Healthcare consumers who are unaware of the varying costs of routine medical tests may take solace in knowing that many physicians don't either.
"Doctors have been shielded from costs for generations," says Leonard S. Feldman, MD, an assistant professor of medicine at the Johns Hopkins University School of Medicine.
"As these systems were developing people thought it was inappropriate to expose the physicians to while they were making decisions about care. Most physicians have no idea what the costs are for whatever they're prescribing. We have never really certainly competed with one another on a regular basis based on price."
Feldman says hospitals keep patients and doctors in the dark on the cost of medical services, which contributes to the soaring cost of healthcare in the United States. With those costs poised to consume about 20% of the national economy, Feldman doctors will have to become more cost savvy.
"At this juncture in society and the world we live in, we can't afford that luxury anymore of taking into consideration these important issues," he says.
Feldman is the lead author of a new online study published this week in JAMA Internal Medicine that found that when doctors are told the price of some diagnostic laboratory test as the tests are ordered, they respond like informed consumers and either order fewer tests or shop around for cheaper alternatives.
"One of the best ways to make sure we are doing the best by our patients is to order the tests that actually needs to be ordered for that patient and to remember that there is a cost to every test that we order," Feldman says.
The Johns Hopkins study identified 62 diagnostic blood tests frequently ordered for patients at The Johns Hopkins Hospital. Researchers divided the tests into two groups and made sure prices were attached to one group from November 2009 to May 2010 at the time doctors ordered the lab tests.
They left out the pricing information for the other group over the same time period. When the researchers compared ordering rates to a six-month period a year earlier when no costs were displayed, they found a nearly 9% reduction in tests when the cost was revealed as well as a 6% increase in tests when no price was given. The net charge reduction was more than $400,000 over six months.
Researchers were surprised to find that the biggest savings came when doctors changed ordering patterns for basic and relatively inexpensive tests that are ordered thousands of times, rather than from costlier tests.
"We thought if we were able to decrease these expensive tests we will make a difference," Feldman says. "It turns out that those expensive tests aren't ordered often enough that decreasing the number ordered by a good percentage… doesn't actually save money."
"Our ABO Blood Typing test was ordered 23,000 times in six months. The complete blood count was ordered 76,000 times," Feldman says. "They dwarf how many times these expensive tests are ordered by many, many orders of magnitude."
For example, once physicians were made aware that the price of a basic metabolic panel was about $3.08 cheaper per test than the $15.44 comprehensive metabolic panel, they began to order the cheaper tests and saved more than $27,000 over six months.
It's not just about saving money, Feldman says, noting that using more discretion when ordering tests can improve quality of care.
"There is not only a monetary cost. There are downstream costs when we order tests without a specific reason that can make the ordering of that test extremely costly," he says.
"If you order testing and for some reason it turned out to be abnormal when you didn't think it would that often leads to another test and another test and another test that may in no way benefit the patient. We need to keep all of this in mind when we are ordering tests. We have a responsibility to provide the high-value cost conscious care that this country needs to afford its healthcare system."
Feldman concedes that there will be times when ordering several diagnostic blood tests at the same time is appropriate, even if some of the tests are later shown to be unnecessary, because it's less expensive to get a quicker diagnosis than it is to have patients run up hospital bills while waiting for answers.
Feldman says he believes that the cost savings found in his study could be replicated at other hospitals.
"If I were a CEO that had a provider order entry system that allowed me to easily show these costs I would certainly start showing the cost of a lot of our relatively inexpensive but frequently ordered tests. You are better off if you are reminded of it right when you need it. That was part of the power," he says.
"There are lots of studies out there where people have gone on with big educational efforts and the problem is they require a lot of effort from the faculty and they are quickly forgotten if they're not brought up on a regular basis," he says. "The beauty of ours was that it was a very cost-effective way of providing this information on a continual basis."
At the same time, Feldman says physicians do not need to be aware of the cost of every test or professional service they provide.
"I am worried about people getting cost overload," he says. "But for the tests that I know that my docs are ordering every day and maybe on a repeat basis… if I had the opportunity that would be where I would try to make the biggest impact."
When merger talks collapse between two health systems both sides usually take pains to insist that the process was pleasant and the parting was amicable.
So it came as a surprise that Sanford Health would offer barbed remarks after announcing that its months-long confidential merger talks with Minneapolis-based Fairview Health Services ended with no deal in place.
"Sanford Health has a philosophical policy of 'only going where we are invited,'" CEO Kelby K. Krabbenhoft said in prepared remarks.
"It seems as though the incredibly positive beginnings to discussions of the merger of Fairview Health and Sanford Health, has turned into a situation that finds us being unwelcome by some interested parties and key stakeholders of our proposed merger partner. It is inconceivable and unacceptable to me that we would ever propose a merger without the affirmation of these parties."
Krabbenhoft's ire appeared to be directed at Minnesota Attorney General Lori Swanson, who at a public hearing she called on April 7, grilled executives from the sprawling South Dakota-based health system on the private negotiations and questioned their motives. Swanson had already detailed her concerns about the merger talks in a March 26 letter to Chuck Mooty, Fairview's interim CEO and board chairman.
"I am troubled that a small group of people, apparently composed of a portion of the Fairview Board of Directors and representatives of an out-of-state entity, would conduct private discussions without the benefit of the public's input regarding a matter of such sweeping consequences…" Swanson said in the letter.
Krabbenhoft in his remarks characterized the proposal as not some out-of-state takeover but, as a "merger of equals."
"It was never suggested that either party was 'acquiring or controlling' the other. Those terms were never contemplated because they would be rejected on their face as unacceptable to each of these historic, charitable, and successful organizations," he said. "Nonetheless, this misperception has been created to serve an agenda that undermines the good faith and emerging trust that is essential in any contemplated merger of this sort."
Mooty, in prepared remarks said he understood why Sanford "would choose to step back at this time, but the news comes as a disappointment."
"Our initial findings about a Fairview/Sanford partnership were positive and the Fairview Board was committed to fully understanding its potential benefit to our patients and communities," he said. "However, we respect Sanford's decision and our Board's current assessment of a Sanford partnership will stop."
Krabbenhoft said he made the decision to withdraw because he was "concerned that the good reputation of Sanford may be injured by a process that only intended the highest of ideals and integrity for what we believed to be a compelling solution to the challenges facing healthcare delivery today and in the future."
He said Sanford would come back to the negotiations only if Fairview and the University of Minnesota "have sufficiently resolved issues within their relationship and secured a positive understanding by Attorney General Swanson of their intentions and plans. Until those conditions seem resolved it appears prudent for Sanford to disengage from this effort and will do so immediately."
Mooty said in his remarks that Fairview would now concentrate on strengthening its existing partnership with the University of Minnesota. "Clearly, we need to ensure strategic alignment between us before we can advance new ideas for the future. However, we feel it is not the time to discuss any proposal that involves the University acquiring Fairview. As a result, our work to evaluate that proposal will stop."
CHI, PeaceHealth Merger Talks Fold
Catholic Health Initiatives and Peace Health have announced that their months of negotiations to form a unified integrated regional health system in the Pacific Northwest have ended with no deal in place.
The two Catholic health systems had signed a nonbinding agreement in mid-August to create the partnership but they said in a joint media release that they "were unable to develop an integrated model that would provide the desired benefits and serve the best interests of both organizations. CHI and PeaceHealth will remain actively engaged in exploring other opportunities to work together to strengthen their respective ministries in the Pacific Northwest."
"Bringing together two large health systems is a very complex and challenging process," John DiCola, CHI's senior vice president of strategy and business development said in an interview.
"It was also a very innovative model," DiCola says. "Though it was a 50-50 joint venture, the new operation would consist of 100% of PeaceHealth's organization and CHI would contribute, if you will, 20% of its organization – the hospitals in Washington and Oregon. We just could not integrate this in the way felt would provide the desired benefits and serve the best interests of both organization and our communities.
"We spend a lot of time trying to work this out. That's the purpose of the due diligence process. CHI and PeaceHealth had good discussions. We agreed on a lot of issues, but all of the pieces have to fit, not just a few of them."
"We will keep the door open, keep the dialogue going; we had good discussions and we maintain a good relationship and have a lot of respect for each other."
Peter Adler, chief strategy officer at PeaceHealth, declined to provide specifics on where the breakdowns occurred in the negotiations, but he said the two health systems ended the talks amicably and by mutual agreement.
Radiologists are complaining that their specialty has been the target of too many sticks and not enough carrots as the federal government looks for ways to control cost growth in Medicare.
The latest skirmish is pitched around the Centers for Medicare & Medicaid Services' 25% multiple procedure payment reduction to Medicare reimbursements for interpretations of advanced diagnostic imaging scans performed on the same patient in the same session. The rule, which took effect in January, applies across all physicians in a practice.
Geraldine McGinty, MD, chair of the American College of Radiology Commission on Economics, is the co-author of a study that she says refutes the government's assumptions that significant efficiencies in physician interpretation and diagnosis are gained when different providers interpret different medical imaging scans performed on the same patient.
"Medicare believes there are efficiencies so that when a subsequent service is performed, that the physician that is furnishing that subsequent service does not have to make the same effort they would have to make if there were no other services performed in the same session," McGinty says. "We don't believe that that is true and our paper clearly shows that it is not."
The rule does not affect the number of scans ordered; only interpretation of scans already performed, and has been expanded to physical therapy, cardiovascular, and ophthalmology technical services as well.
McGinty's study found no intra-service work duplication when different exam interpretations were offered by different physicians in the same group practice. She says small potential efficiencies were found regarding pre- and post-service activities.
Across all scan types this corresponds to a maximum Medicare professional component physician fee reduction of only .95% – 1.87% for the same type of scan. For services from different scan types duplications were too small to quantify, McGinty's study found.
"In a practice like mine… the patient who sustains a head injury and a pelvic injury, if they had a CT scan, that would be read by the neuro-radiologist. And if they had a pelvic fracture, that would be read by a body imager or a musculoskeletal radiologist," McGinty.
"Other than the context that both physicians knowing that the patient had come from a trauma, there is no overlap in terms of what the physicians have to do. There is nothing that makes it easier for that doctor reading that complex pelvic CT… to know that a head CT was done."
McGinty says the ACR is asking CMS to rescind the rule.
"CMS said if they were given additional data to help them understand why there weren't efficiencies across the group practices they would consider it," she says. "We met with CMS on Monday and the paper was out just in time to share it with them. They agreed that they would read it carefully and consider it."
McGinty says ACR believes it's more effective to target reductions in inappropriate imaging by "helping physicians understand what test is appropriate for the clinical set of circumstances they're seeing with the patient."
"Sometimes that will be less imaging but sometimes it will be more imaging," she says. "More often it will be doing the right imaging first, as opposed to doing a test and realizing it didn't get you what you wanted, whereas if you had had the support of a radiologist and the appropriateness criteria that we developed with the ACR, you would have done the right test first."
Even with the reduced reimbursements, McGinty says physicians will continue to offer their interpretations of imaging because they put their patients' health first and foremost.
"We are doctors. I would find it hard to believe that somebody would not do an additional study because of these cuts," she says. "But again there are a lot of stresses on outpatient practices and people are trying their best to provide high quality care and invest in new technology and give jobs to their staff and balance all those things."
It is not clear what costs savings will be generated by these latest reimbursement cuts, but McGinty says this is part of larger and troubling trend to target imaging services.
"It's important to understand that radiology has been subjected to something like 12 cuts since 2006. This is just one additional cut on top of many cuts, so practices are really hurting," she says. "We are looking for incentives to provide higher quality care but there have been a lot of sticks and very few carrots for radiology."
With all of the challenges facing healthcare providers under the Affordable Care Act, it's sometimes easy to forget that progress is being made on common sense care coordination strategies.
This is not to say that there aren't legitimate questions about the efficacy of "ObamaCare" or other healthcare reforms that are designed to slow healthcare cost growth, all of which will be debated for years to come.
However, across the country we are seeing a growing movement toward strategies that identify community resources and pull them together to improve population health.
Rick Foster, MD, senior vice president of quality and patient safety at the South Carolina Hospital Association, spoke with me recently about the Palmetto State's efforts to reduce readmissions and emergency room visits by improving care coordination. "We are trying to look at all the different organizations involved in care transition work," Foster says.
Some of the state's projects are in line with Center for Medicare & Medicaid Innovation care demonstration projects, including an initiative in the Spartanburg region that starts this month and that will send home health coaches into the homes of chronic care patients within 72 hours of discharge.
"Our hospitals realize that we are moving [toward] value-based reimbursements. We have been working for a number of years in a collaborative environment on how to move toward improving quality and safety and also better coordinating care. That challenging transition from volume-based to value-based won't happen overnight. You can't just flick a switch."
Instead, Foster expects to see more and more partnerships developing between hospitals and other health and healthcare organizations to improve community health, particularly for people with chronic or complex illnesses.
"Hospitals are going to be major partners in the community to improve community health," he says. "How do they work with other providers, physicians, home health and nursing homes and the community in general to reach out and keep the patients out of the hospital? This is very much new territory; the value-based approach that asks 'what are we doing for the community' and also tries to focus on those patients who do need the hospitals."
South Carolina's hospitals have been willing to work with other partners, Foster says, because they realize they can't do it alone.
"They have to work with home health agencies and long-term care facilities and primary care physicians. We also have a good relationship with the state office on aging and there are area offices where they can tap into services like Meals On Wheels that traditionally were seen as somewhat separate from the healthcare system. Now we're realizing that they are all interrelated if you are going to effectively manage chronic illnesses outside of the hospital."
Foster says it's critical to leverage the existing resources that will vary from community to community.
"Maybe the same volunteers doing Meals On Wheels we could provide some basic training on how to be a home health coach and at least provide basic assessments of patient needs," he says. "Then you may have a second level where you have some folks with clinical training. We are doing a pilot in one rural community here around community para-medicine. We take paramedics when they're not on calls to clinical evaluations or withdraw blood for evaluations. They can go to the homes of the highest risk patients."
"We have some communities where retirees are being trained to be community health workers. We have some communities working with a university or a college and they are getting students to do this. It's a matter of looking at the resources in the community, what already exists, and how to connect them in a more efficient way. Until now they've been kind of in their own silos."
These home health visits will allow providers to evaluate and address living space issues for patients that would go unnoticed inside the hospital walls."
"There will be patients with high readmissions rates that just have a very poor environment as far as they don't have a good social infrastructure with family members or access to transportation. Those are the ones where having the Meals On Wheels and having someone come into their home to check on them is important."
How will we know if these coordinating efforts are working?
"Probably the biggest measure at least in the early stages is going to be readmission rates and preventable emergency room visits," Foster says. "That is the way you identify these patients before they have two, three, four, five readmissions, is that initial admission or the ones who are coming in frequently to the ER."
When asked what healthcare delivery in South Carolina might look like in 10 years from now, Foster envisions regional integrated community health systems and health improvement networks that include hospitals, patient-centered medical homes, and primary care practices that are connected with other human services.
"They won't have to be owned by one entity. You would have some coordinating structure a core group but you pull together all the key resources and have a community-based health improvement network that is looking at the needs of various populations," he says. "Right now this is focused on the resources that will help people manage their own health."
Hospital Corporation of America announced this week that it has formed an alliance with a Dallas-based freestanding emergency room system.
HCA North Texas Division's "Hospital and Emergency Care Alliance" with First Choice Emergency Room was touted in a joint media release by the two for-profit companies as a way "to improve patient continuity of care through multiple access points for emergency services within the Dallas/Ft. Worth area… from First Choice ER to HCA's area facilities, as well as create a joint quality assurance process and team."
The two companies have formed a "Joint Quality Assurance" team to support coordinated transfers of patients between facilities.
The agreement aims to ensure bed availability for First Choice ER patients needing acute care services provided by nearby HCA hospitals. First Choice ER transferring patients will avoid HCA hospitals' emergency departments and will instead be directly admitted when non-emergent criteria are met.
Thomas S. Hall, president/CEO of First Choice, said in prepared remarks that "this exclusive collaboration gives our patients direct access to HCA's 5,000 physicians and 11 local hospitals" in the North Texas region.
Adam Powell, a healthcare economist and President of Boston-based Payer+Provider Syndicate Today, said in an interview that the alliance makes sense for both companies.
"Freestanding emergency rooms appeal to consumers because they offer potentially shorter wait times and greater convenience than traditional hospital emergency rooms. However, they lack the extensive capabilities of hospitals and need to transfer a portion of their patients," Powell says.
"One issue that they confront when doing so is a lack of availability of inpatient beds. Freestanding emergency rooms compete with emergency rooms attached to hospitals for inpatient capacity. When hospitals are overcrowded, they must divert outside admissions. This alliance provides First Choice patients peace of mind that they will have access to a decent hospital bed if they need one. Furthermore, the alliance provides HCA with a pipeline of patients in legitimate need of a hospital admission. Thus, First Choice benefits by being able to improve its perceived quality, while HCA benefits from the increased volume."
First Choice ER will have access to the HCA Transfer Center, a 24/7 call center to coordinate patient transfers. The two companies said the access will facilitate physician-to-physician conversations and communication with the admitting hospital.
Tony Kong, director, Healthcare & Life Sciences for consultants West Monroe Partners, LLC, says the alliance is part of the overall trend in healthcare for hospitals to expand patient access in anticipation of the Patient protection and Affordable Care Act.
"The anticipation is that we will have more consumers with coverage come Jan. 1, 2014, which means there has to be greater access to care. That care has to come anytime of the day, when there is a need," Kong says.
"We are seeing this across multiple geographies where hospitals either open up their own emergency room center that is more designed like an urgent care clinic or they are partnering with another organization, such as HCA and First Choice."
First Choice operates 17 facilities in Dallas/Fort Worth, Houston, Austin, and Colorado Springs. The facilities are staffed by board certified emergency physicians and registered nurses, and are equipped with advanced diagnostic equipment.
HCA North Texas Division operates 10 hospitals, one children's hospital, one psychiatric hospital, 12 ambulatory surgery centers, 13 imaging centers, and two freestanding emergency rooms in the DFW area.
Solid job growth in the healthcare sector in March continued to prop up national job creation numbers during an otherwise anemic month. Healthcare accounted for 23,400 of the 88,000 new jobs created in March, according to the U.S. Bureau of Labor Statistics.
Within the healthcare sector, 15,000 jobs were created in ambulatory services, which includes physicians' offices, and 8,000 jobs were created in hospitals.
Andrew Hanson, a research analyst at the Center on Education and the Workforce–Georgetown University, says healthcare job growth is expected to continue grow as Americans age.
"The fact that healthcare is one of four new jobs in this month's report is very much in line with our expectations," Hanson says. "Given the sort of underwhelming job growth overall, the number of healthcare jobs might be a little bit less than we might expect, but that doesn't have so much to do with its strength relative to other jobs. It's more that there is weak job growth overall in this report."
Healthcare created 62,900 new jobs in the first quarter of 2013, a pace that is significantly lower than the 88,200 jobs in the first three months of 2012. In 2012 the healthcare sector created 320,600 jobs, BLS data show.
Hanson cautions against reading too much into the dramatic drop in job growth in the first quarter of 2012 when comparing the same period in 2012.
"It's not a big deal," he says. "If you look at the trend in healthcare jobs, the number of healthcare jobs that the economy has been adding on a monthly basis beginning in 2009 is very steady. There are fluctuations from month to month, but they are subject to revision."
Slightly more than 14.5 million people worked in the healthcare sector in March, with more than 4.8 million of those jobs at hospitals and more than 6.4 million jobs in ambulatory services, which includes more than 2.4 million jobs in physicians' offices.
BLS data from February and March are preliminary. "Keep in mind these numbers are going to be subject to revision," Hanson says. "The BLS made provisions that added 75,000 from previous reports in this edition. Just because growth appears weak for a month doesn't mean it is going to be weak in the long run. You have to look more at long-run growth trends in healthcare and the overall job market."
In the larger economy, the nation's unemployment rate remained essentially unchanged at 7.6% in March. New jobs were largely clustered in the professional and business services sector (51,000), construction (18,000), and healthcare (23,400). However, retail trade shed 24,000 jobs. Within the government sector, U.S. Postal Service employment fell by 12,000 jobs.
BLS said 11.7 million people were unemployed for the March, which is a slight improvement from February's measure. The number of long-term unemployed, defined as those who have been jobless for 27 weeks or longer, was little changed at 4.6 million in March, and represented 39.6% of the unemployed.
"The report overall was underwhelming—88,000 jobs in March after 237,000 jobs in February," Hanson says. "The unemployment rate fell, but mostly for bad reasons. More people were leaving the workforce than jobs were being added. People shouldn't interpret the falling unemployment rate as a good sign. Really it's about the number of jobs we are adding each month. Sometimes people inflate the importance of these monthly numbers, and really it's more important to look at the long-run trends."
Intermountain Healthcare will pay the federal government $25.5 million to resolve self-reported Stark Law and False Claims Act violations for improper financial relationships with referring physicians, the U.S. Department of Justice said Wednesday.
Federal officials said in a media release that Intermountain's Stark violations centered on employment agreements that paid physicians bonuses that improperly considered the value of patient referrals, and on improper office leases and other compensation arrangements between Intermountain and referring physicians.
"The Department of Justice has longstanding concerns about improper financial relationships between healthcare providers and their referral sources, because such relationships can corrupt a physician's judgment about the patient's true healthcare needs," Stuart F. Delery, Acting Assistant Attorney General for the Department's Civil Division, said in prepared remarks.
"In addition to yielding a recovery for taxpayers, this settlement should deter similar conduct in the future and help make healthcare more affordable for patients."
Intermountain CMO Brent Wallace, MD, said in prepared remarks that the Salt Lake City-based provider and the largest health system in Utah discovered the possible violations in 2009 during its "regular review process" and immediately voluntarily disclosed them to the U.S. Attorney's Office in Utah for review.
"Intermountain's management recognized that potential penalties could be significant, but at no time was there ever any consideration given to not self-disclosing the issues," Wallace said. "These issues were primarily technical in nature and involved things such as lack of proper paperwork involving leases of physician offices and service agreements. That individual physicians are listed in the attachments to the agreement does not mean that a physician committed any wrongdoing of any kind."
Wallace said all of the issues detailed in the 2009 self-disclosure have been corrected and that "none of these issues adversely affected in any way the quality, appropriateness, or cost of patient care at Intermountain hospitals and clinics."
Wallace said some of the blame for the violations were "due to the complexity of nearly 300 pages of federal regulations and commentary governing relationships between hospitals and physicians that have evolved and changed over time and were modified in 2007."
"Intermountain should have monitored this situation more closely. We are embarrassed that these issues occurred and regret that our controls at the time were inadequate to properly monitor these matters," Wallace said.
"Since discovering these concerns Intermountain has improved its controls by implementing a rigorous centralized process to track all physician agreements. Intermountain added additional staff, implemented advanced tracking software, created oversight councils, and put additional training in place to assure compliance with all relevant regulations. Intermountain will continue the practice of regularly evaluating and monitoring all business practices to ensure legal and regulatory compliance. We have learned from this experience and are a better company as a result."
Federal prosecutors said that they have used the False Claims Act to recover more than $10.2 billion since January 2009 in cases involving fraud against federal healthcare programs.
The basics of the study are thus: Researchers from Harvard Medical School and the Harvard School of Public Health examined administrative data from nearly 10 million Medicare fee-for-service admissions for acute myocardial infarction, congestive heart failure, and pneumonia between 2002–2010.
Comparing 30-day mortality rates of CAHs and non-CAHs in urban and rural settings, they found that while CAHs and non-CAHs had comparable mortality rates for the three conditions in 2002, CAHs gradually fell behind each year to the point where by 2010 CAHs mortality rates were 13.3% and non-CAH mortality rates were 11.4%, a difference of 1.8%.
In an interview, the study's lead author, Karen E. Joynt, MD, MPH, a cardiologist and an instructor at the Harvard Medical School and Harvard School of Public Health, offered her interpretation of the findings:
HLM: Were you surprised by your findings?
KJ: "We were actually. We had done a paper two years ago in which we looked at critical access hospitals in a cross-sectional fashion, a one-time look at outcomes and resources at critical access hospitals. We received quite a bit of feedback on that work from rural providers.
Many of them said it is not fair to look at one point it time because we have improved over time. You should look longitudinally. We thought that was a fair request and we did, and to our surprise we found that critical access hospitals had been performing, at least on mortality, relatively equivalently to non-CAHs earlier in the decade, but that over the past 10 years we have seen a separation of outcomes."
HLM: Are you confident that your study makes an apples-to-apples comparison?
KJ: Everyone on in the study is a Medicare patient over the age of 65 and not in a Medicare HMO. I don't think there is any reason to think that the difference between rural and non-rural patients, or more relevantly rural patients that go to critical access hospitals versus rural patients that go to other rural hospitals, that the differences in their characteristics should have changed so much over time as to make these results appear from nowhere.
Certainly rural patients are different from urban patients, but in most research the people who do the best are suburbanites. I don't think this is driven by simply the fact that rural patients are so much sicker and so much older because we control for things like age and diabetes. We don't perfectly control for things like smoking or obesity because we can't measure those. But I don't think the changes over time have been so vast that that is what we are looking at here.
HLM: How significant is the 1.8% difference in mortality rates?
KJ: What it is telling us is that we have left these hospitals behind because 1.8% of the absolute mortality rate is 1 in 50 people. That is more than 10% of the actual rate, so in clinical trial speak it is a significant relevant risk.
But what is important here is not the specific numbers, but recognizing that the effort to carve these hospitals into a separate program than the remainder of the hospitals in the country has not done them any favors and it hasn't done any favors for the people seeking care at these hospitals.
If you live in rural Maine or rural Nevada and you present to your local hospital having a heart attack in this day and age we should expect that a system of hospital care will figure out how to treat that patient as optimally as possible.
What this [research] points out to me is not so much a problem with the hospitals as it is a systems problem. It's not realistic to expect that these small hospitals should have the same resources as other hospitals do. Having a 24-hour cardiac cath lab in a hospital with 10 beds doesn't make any sense.
But if you live out there and you have a heart attack, we should have a system that gets you where you need to be. With telemedicine and other technologies it seems like as a system we could do better for rural patients.
It's not that these hospitals are doing a bad job. It's that we are asking them to do an impossible job if they are not supported. I am a cardiologist. I work in an academic medical center. The resources that I have at my disposal at an academic medical center are completely different from the resources that a physician has working at a critical access hospital. I cannot imagine how hard that job must be.
The doctors working at critical access hospitals are probably the hardest working doctors in medicine. [That means] being the only person in a hospital trying to take care of someone who with a hip fracture and someone who walks in with a heart attack and someone who walks in with heart failure or a stroke wherein today's era of medicine we are changing the guidelines for the treatments for these things on a few monthly basis.
This may be pointing out that with the advancements we have been able to make treating heart attacks and heart failure and to some degree pneumonia, these hospitals and rural patients are getting left behind. That seems like a fixable problem.
HLM: Do you believe the CAH Program has been a success or a failure?
KJ: There were two big components of the Critical Access Hospital Program. One was to give them cost-based reimbursements. The other was to exempt them from quality reporting. They are not included in value-based purchasing. They are not included in accountable care organizations. They are not included in public reporting.
Part of the program worked terrifically. The closures have dropped tremendously. There really are areas in which there would be no medical care if it weren't for this program. But leaving them on their own and saying 'good luck' has not been a good solution.
I understand that (the Centers for Medicare & Medicaid Services) was trying to relieve these hospitals of an administrative burden by not including them, but the consequence seems to be that no one knew these outcomes were not improving at many of these critical access hospitals in the way that we were seeing mortality from many inpatient conditions drop over the last decade.
That to me in this era of transparency and trying to build better systems and being more patient-centered doesn't make much sense as a long-term strategy.
Another issue is [that] there are plenty of critical access hospitals that are not rural or isolated. It is hard to understand the rationale if it is a medium-sized hospital in a suburb for why their under this different set of regulations.
At this point we should be thinking about systems and transparency and not leaving out rural communities. It feels wrong to me that we are OK with folks in rural areas having worse outcomes than folks in urban areas. We can do better than that.
HLM: Your study suggests that "new efforts" are needed to improve mortality rates at CAHs. What do you recommend?
KJ: Finances and the quality should be separate. Regardless of how the hospitals are financed if you are providing care to Medicare patients in this day and age… people deserve to understand data and to see what is happening at their local hospitals and exempting 1,000 hospitals from having to participate in quality monitoring is not a good long-term solution.
HLM: Do you believe that the reporting exemptions for CAHs should end?
KJ: I do. The burden of reporting can be lessened if that is the barrier. If the barrier is we need to have them electronically report because they don't have the infrastructure to be able to have a person doing the chart instruction, then let's find electronic records systems, which would help all small rural hospitals.
Saying they are too small to collect data is not realistic in this day and age. Something about the participation in these quality programs and reporting really does make a difference in what these hospitals are able to do. Small rural hospitals that aren't critical access hospitals still have to submit their quality data and have to function in the same roles as everybody else.
HLM: How do you address criticisms that your study relies on administrative data to measure clinical outcomes?
KJ: I agree there are limitations to administrative data, but it doesn't make it useless. Administrative data can show us a pattern and then we need clinical and qualitative data to understand why. The wrong response to this paper would be to say there is obviously no problem. This is all a trick of administrative data. That is a little biased.
The appropriate response is that it looks like there is a problem in that these hospitals appear to be falling further and further behind.
What we need to do now is to ask why and what can we do about it. If we determine that it's all because the patients are older and sicker then OK, let's figure out what we need to do to take care of older sicker rural people. And if we find out it's because patients are declining transfer to the big city hospital because they want to be close to home, OK then let's find telemedicine or tele-ICU or other consultations to bring the care to them so they can stay close to home.
It's not fake data. These are real people. They are dead. These are Medicare patients, someone's grandmother who died. It is true that administrative data will give you statistically significant results for very small differences because we have millions of people. That is a sample size issue.
But the differences, particularly for acute MI are clinically relevant. It is more than a third higher mortality over the last decade for heart attacks where the rest of the country has been improving care for heart attacks. That is not write-off-able.
Let's stop ignoring these hospitals and see if we can think creatively to help rural patients do better.
HLM: How should CAHs reforms be implemented?
KJ: We need to get the stakeholders from critical access hospitals at the table and hear from them what they need. I'm not the person who will come up with a solution. My guess is that critical access hospitals could lay out for us 'these are the barriers I face in trying to get my patients access to X,Y,Z care and these are the things that could make my job easier.' We should listen to the critical access hospitals and find out how federal and state policies can connect them better and enable them more and give them more resources.
I don't actually care about the hospitals so much. I care about the patients. If your grandmother lives in some rural place you want to know that there is some community institution close to home where she can go if she needs something and where they can make a decision about what is best for her, on whether or not the things she needs can be provided there, and that she can come back there to get whatever she needs when she is done in the big city.
The system as it is now is not very robust for rural patients.
The nation's critical access hospitals have higher mortality rates on several key measures than do urban and rural hospitals without the specia l designation, and the trend steadily worsened over the past eight years, according to a new study by Harvard researchers.
Researchers from Harvard Medical School and the Harvard School of Public Health examined administrative data from nearly 10 million Medicare fee-for-service admissions for acute myocardial infarction, congestive heart failure, and pneumonia between 2002–2010.
The researchers compared 30-day mortality rates of CAHs and non-CAHs in urban and rural settings. They found that while CAHs and non-CAHs had comparable mortality rates for the three conditions in 2002, CAHs gradually fell behind each year to the point where by 2010 CAHs mortality rates were 13.3% and non-CAH mortality rates were 11.4%, a difference of 1.8%.
"What it is telling us is that we have left these hospitals behind because 1.8% of the absolute mortality rate is one in 50 people. That is more than 10% of the actual rate so in clinical trial speak it is a significant relevant risk," Karen E. Joynt, MD, lead researcher of the study, said in an interview.
"But what is important here is not the specific numbers but recognizing that the effort to carve these critical access hospitals into a separate program than the remainder of the hospitals in the country has not done them any favors and it hasn't done any favors for the people seeking care at these hospitals," says Joynt, an instructor at Harvard Medical School and the Harvard School of Public Health.
When the Critical Access Hospital Program was created by Congress in 1997, qualifying CAHs could have no more than 25 beds and had to be located at least 35 miles from the nearest hospital. Since then states have been given leeway to broaden eligibility and now only 20% of the CAHs current meet the distance requirement and nearly one in four U.S. hospitals is designated as a CAH.
CAHs are exempted from prospective payments but are reimbursed at 101% of costs. They are also exempted from national quality improvement programs.
Joynt says that while the higher reimbursements have allowed scores of CAHs to keep their doors open, it may be time to reconsider their exemptions from reporting and quality improvement programs.
"Part of the program worked terrifically. The closures have dropped tremendously. There really are areas in which there would be no medical care if it weren't for this program. But leaving them on their own and saying 'good luck' has not been a good solution," she says.
"I understand that (the Centers for Medicare & Medicaid Services) was trying to relieve these hospitals of an administrative burden by not including them. But the consequence seems to be that no one knew these outcomes were not improving at many of these CAHs in the way that we were seeing mortality from many inpatient conditions drop over the last decade. That to me in this era of transparency and trying to build better systems and being more patient-centered doesn't make much sense as a long-term strategy."
The American Hospital Association took issue with the findings and said the "data presented now are not a reliable presentation of what is actually happening at critical access hospitals."
"CAHs and other small hospitals have engaged in a variety of practices designed to identify and rapidly transfer patients who could benefit from more aggressive interventions at nearby hospitals that have the capability of intervening. One reason for seeing a rise in mortality in some CAHs could be because the hospital may tend to keep patients that are too sick for transfer or not stable enough. As a result CAHs' data maybe skewed toward patients who are sicker," AHA said in an email exchange.
The contentious study also prompted an editorial rebuttal in the same issue of JAMA from Stanford University researcher John P.A. Ioannidis, MD, who wrote that "even if the differences in CAH vs. non-CAH mortality rates are genuine, this does not mean that policy makers should necessarily advocate for CAHs to collect and report performance data or to participate in quality improvement programs, change their payment mechanisms, or both."
"The study by Joynt et al can minimally inform such decisions. Trying to impose quality data collection and reporting in such hospitals that have already strained resources may actually do more harm than good. Even for non-CAHs, the evidence is tenuous that performance and quality initiatives do work."
Gary Tiller, CEO of Ninnescah Valley Health Systems, Inc. in Kingman, KS, which operates the 25-bed Kingman Community Hospital, says the study "has renewed my lack of faith in the Harvard School of Public Health."
"This is all much ado about nothing. There are a lot of ways to look at the data depending upon what you want to do with it," Tiller says.
"They said we don't participate in quality reporting or quality initiatives. I don't know where they got that notion. We've done so much of it. We are reporting well over 100 data points now and the great bulk of the CAHs are doing that. They obviously never went out to a CAH."
"I don't need more paperwork. I've had to divert way too many staff hours to that kind of crap already. I am not really thrilled about having to do more of it."
Joynt concedes that the use of administrative data for clinical studies has limitations "but it doesn't make it useless."
"Administrative data can show us a pattern and then we need clinical and qualitative data to understand why," she says. "The wrong response to this paper would be to say there is obviously no problem. This is all a trick of administrative data. That is a little biased."
"It's not fake data. These are real people. They are dead. These are Medicare patients, someone's grandmother who died. It is true that administrative data will give you statistically significant results for very small differences because we have millions of people. That is a sample size issue. But the differences particularly for acute MI are clinically relevant. It is more than a one-third higher mortality over the last decade for heart attacks where the rest of the country has been improving care for heart attacks. That is not write-off-able," Joynt said.
"The data doesn't tell us the details about why and it doesn't tell us how we can fix it. It tells us maybe there is a problem here. Let's stop ignoring these hospitals and see if we can think creatively to help rural patients do better."