Nearly half of all working-age adults, about 84 million people, went without health insurance at some point in 2012 and another 30 million people had out-of-pocket costs that were so high, they were underinsured, a survey released by The Commonwealth Fund shows.
"This new report reveals some good and unprecedented news; a decline in the number of young adults who are uninsured, most likely due to the [Patient Protection and] Affordable Care Act's requirement that children under age 26 be allowed to join or remain on their parents health plan," The Commonwealth Fund President David Blumenthal, MD, said Thursday at a teleconference with reporters.
"But overall, the survey shows the continuation of the bad news that sparked the moves to reform our dysfunctional healthcare system. To begin with, large numbers of uninsured Americans—millions—are facing problems getting the help they need. They are financially squeezed by the burdens of high deductibles and far too many Americans are hampered by medical debt. These findings point clearly to the need to move forward with implementation of the law," Blumenthal says.
The percentage of people who were uninsured, underinsured, or had gaps in their health coverage grew steadily between 2003 and 2010, with the number of underinsured nearly doubling from 16 million in 2003 to 29 million in 2010. Between 2010 and 2012, however, the numbers of underinsured adults leveled off, growing to 30 million, the survey found.
That is partly because of slower healthcare cost growth and lower overall health spending by strapped consumers. However, provisions in the PPACA that require insurers to cover preventive care at no cost to patients are also making healthcare more affordable for many consumers, the report says.
The telephone survey was conducted in English or Spanish by Princeton Survey Research Associates International from April 26 to Aug. 19, 2012 and included a random, nationally representative weighted sample of 4,432 adults ages 19 and older.
Pollsters projected that 80 million people did not go to the doctor or did not get a prescription filled in 2012 because they couldn't afford it. Medical debt also continues to burden many households, with 41% of working-age adults, an estimated 75 million people, having problems paying their medical bills, up from 58 million in 2005.
Nearly one in five people were contacted by a collections agency for unpaid bills, and 16% had to make lifestyle changes because of medical bills. More than 40% of survey respondents who reported having trouble with medical bills, an estimated 32 million people, had a lower credit rating because of unpaid bills and 6%, an estimated 4 million people, declared bankruptcy because of their bills.
Major provisions of the PPACA do not take effect until 2014, but the survey estimated that 87% of the 55 million people who were uninsured at some point in 2012 would be eligible for some form of subsidized insurance either through the expanded Medicaid rolls or through the health insurance exchanges.
In addition, as much as 85% of the 30 million underinsured adults in 2012 might be eligible for either Medicaid or subsidized health insurance with reduced out-of-pocket costs under the PPACA.
The survey also found that:
Nearly three-of-four working-age adults with incomes of less than $14,856 a year for a person or $30,657 for a family of four — an estimated 40 million people — were uninsured or underinsured;
Nearly 60% of adults with incomes between $14,856 and $27,925 for an individual or between $30,657 and $57,625 for a family of four — or 21 million people — were uninsured or underinsured;
Uninsured adults were less likely to receive recommended preventive care. Only 48% of women who were uninsured during the year received a mammogram compared to 77% of those who were well insured all year.
Forget Powerball. The odds of becoming a millionaire are much better for Medicare fraud whistleblowers.
Health and Human Services Secretary Kathleen Sebelius this week unveiled a proposed rule that would pay rewards of nearly $10 million to Medicare beneficiaries and other whistleblowers whose fraud tips identify and recover funds.
"President Obama has made the elimination of fraud, waste and abuse, particularly in healthcare, a top priority for the administration," Sebelius said Wednesday in prepared remarks. "Today's announcement is a signal to Medicare beneficiaries and caregivers, who are on the frontlines of this fight, that they are critical partners in helping protect taxpayer dollars."
The announcement comes as HHS bolsters other antifraud initiatives this month, including the expansion of the Senior Medicare Patrol, a volunteer-based program that educates Medicare beneficiaries on how to prevent, detect and report Medicare fraud, waste and abuse.
The federal government has recovered more than $14.9 billion in fraud over the past three years, thanks in part to whistleblowers. Under the proposed changes, a person who provides information leading to the recovery of money can collect a reward of 15% of the amount recovered, up from 10% under the current rules. If CMS recovers more than $66 million under the proposed change, the reward is capped at $9.9 million.
The proposed changes are modeled on an IRS program that has returned $2 billion in fraud since 2003, HHS said in a media release.
The proposed rule would also strengthen some provider enrollment provisions including allowing HHS to deny enrollment of providers affiliated with an entity that has unpaid Medicare debt, deny or revoke billing privileges for individuals with felony convictions, and revoke privileges for providers and suppliers who abuse billing privileges, HHS said.
The volunteer-based Senior Medicare Patrol program has since 1997 taught more than 3.5 million beneficiaries how to recognize and fight fraud and abuse. More than 7,000 tips have been called in to the Centers for Medicare & Medicaid Services and the Office of the Inspector General.
To expand the SMP program's capacity, the Administration for Community Living issued new funding that makes each of the current 54 SMP projects eligible for rewards from a pot of up to $7.3 million, HHS said.
Mergers and acquisitions are rampant in healthcare these days as large health systems get larger and use their size and market share to improve efficiencies, coordinate care, reduce costs, and leverage terms with vendors and insurers.
At the other end of the spectrum are critical access hospitals. These tiny, isolated providers by their mission and geography aren't able to tap into the advantages of this bigger-is-better delivery model. So they improvise.
In Montana, rural providers are in the second year of a three-year pilot project that eventually aspires to provide each of the Big Sky State's 48 critical access hospitals with a "better health improvement specialist." Funded by a $10.5 million Center for Medicare & Medicaid Innovation Grant, these specialists will coordinate and improve post-discharge care plans, identify operational inefficiencies, and use data that they collect to proactively target potential health issues to reduce readmissions and emergency department visits.
"We are a support mechanism for these critical access hospitals to identify where failure modes are happening within the healthcare delivery system in their system and their relationships with regional partners," says Denyse Traeder, director of the Frontier Medicine Better Health Partnership, which is coordinating the project.
"Our work with the critical access hospitals identifies where some costs savings can be made and identifies the training and opportunities that critical access hospitals could benefit from to reduce waste, save money, improve care and outcomes and satisfaction."
The project also tries to address the near universal complaint from critical access hospitals that they're left in the dark when patients return to their homes after discharge from larger hospitals.
"That is one of the biggest things that we hear from our partners is we lose track of them," Traeder says. "Half of the time we don't even know if they went in and we don't know when they come back until something critical happens and they are back in the ER. Had we known what had happened to them we could have either helped prevent it or found someone in the community to do some home care."
"Traditionally we've not able to get patients back in their home communities from regional partners not because the regional partners didn't want to but because there wasn't an action plan and they didn't know if the critical access hospital had the capability or if it was an appropriate transfer back," Traeder says.
"We're partnering with regional facilities and opening communications, developing care plans and transfer protocols and those types of documents and procedures that haven't been in place before that will be standardized between critical access hospitals and larger facilities to get those patients back into their home communities because that is where we know they want to be."
The hospitals will use electronic medical records to guide a care team that includes hospital staff, primary care physicians, patients and their families, and health coaches to coordinate daily post-discharge follow up to ensure that treatment regimens such as medication compliance are followed.
If successful, the pilot project hopes to reduce patient costs by 7% to 15% for the three-year period, improve outcomes by 10%, and improve patient satisfaction by 30%. Traeder says many cost drivers have already been identified.
"We are looking at avoidable readmissions. We are looking at ambulatory care sensitive areas, hot spotting them, care coordination and prevention and the number and source of those. Are we duplicating many tests from critical access hospitals to regional facilities and if we are what is the cost," she says.
"Another issue is transportation. We are calling out a fixed wing or a rotary much more often than we need to. Ground transportation would be much more appropriate when one flight is about $15,000. That is going to be a huge cost savings for us. It is going to be tricky because we are going to have to tease out what is appropriate and what is not. But if we can train our staff to appropriately use ground transportation or some of the other interventions we will reduce the costs of those areas. Those are a huge cost that we are identifying."
Another key responsibility of these better health improvement specialists will be to collect data—which has been a particularly nettlesome problem for critical access hospitals.
"It is not for lack of wanting to do it, but there are some real barriers in the way of reporting. It is not apathy but more of a logistical issue," Traeder says. "One of the biggest benefits to the critical access hospitals is that yes we are asking for data which requires some work but we are giving it back to them immediately. It is not collecting data and never seeing it again and not benefitting from it, which is frustrating for people. We are able to gather the data, give it to our analytics partner who runs the numbers and gives it back to them immediately."
"We did a rural operational assessment on 10 critical access hospitals during the last month and they received that data last week. They are able to immediately take that data and start making changes in their system."
While the pilot project focuses on the individual challenges of each critical access hospital, Traeder says the ongoing communication and care coordination is building a sense of community among these tiny and isolated hospitals charged with a vital mission.
"We know there is power in numbers," she says. "One critical access hospital trying to voice a concern over the healthcare system is like an insect screaming in an arena. When we put them together and build this critical access consortium there is power in numbers and that creates a voice for critical access hospitals in Montana."
Houston's St. Luke's Episcopal Health System says it will "transfer" into Catholic Health Initiatives, giving the sprawling not-for-profit health system a new footprint deep in the heart of Texas.
In exchange, CHI will transfer more than $1 billion to create an Episcopal Health Foundation to serve the area's underserved population. CHI will transfer another $1 billion for future investment in the health system, the two systems announced jointly.
"The relationship with Catholic Health Initiatives ensures the Greater Houston area will retain one of its great healthcare institutions, while best preparing St. Luke's to meet future changes in healthcare," Kevin Lofton, president/CEO of Englewood, CO-based CHI said in prepared remarks.
The name of the combined system will be shortened to St. Luke's Health System. The combined entities include all of St. Luke's: the Texas Medical Center campus, and suburban hospitals in The Woodlands, Sugar Land, Pasadena and The Vintage, the health systems said.
CHI will maintain all physician models and all employees will remain employees of St. Luke's. CHI will continue St. Luke's affiliations with Baylor College of Medicine, Texas Heart Institute, Kelsey-Seybold Clinic, Texas Children's Hospital and MD Anderson Cancer Center, the health systems said.
The deal is expected to be completed this summer after regulatory approvals.
"It looks like St. Luke's is undergoing a religious conversion," healthcare economist Adam Powell said in an email exchange with HealthLeaders Media. "Money resulting from the sale of the health system will be used to both create a fund to meet the needs of the underserved and to improve the health system's facilities."
The St. Luke's Episcopal Health System Board needed 11 months to cull through 30 prospective partners. The list was narrowed to three finalists last month and the board approved the CHI deal last week, citing the two systems' cultural compatibility, CHI's commitment to continuum of care, and its avowed respect for "the people who made St. Luke's what it is today," the systems said.
"Given the margin pressures being felt in healthcare and the age St. Luke's facilities, this transaction provides a needed injection of capital," Powell says. "Catholic Health Initiatives has historically lacked a Texas presence, and this purchase enables them to enter the market. While alternative purchasers were available, St. Luke's avoided potential anti-trust concerns by picking an outside suitor," says Powell, president of Boston-based consultants Payer+Provider Syndicate.
CHI is the nation's second largest faith-based health system with 78 hospitals and other facilities operating in 17 states. The deal comes weeks after CHI and Vancouver, WA-based Peace Health cancelled merger talks. Tony Kong, director, Healthcare & Life Sciences at consultants West Monroe Partners LLC, says CHI has been actively looking to grow and expand its portfolio of faith-based hospital systems.
"Since they were not able to reach agreement with Peace Health, this acquisition is not a big surprise," Kong said in an email exchange. "The cultural values fit and the opportunity to expand into Houston makes this deal very attractive for CHI and St Luke's."
"I like the fact that CHI is funding $1 billion to create a new Episcopal Health Foundation that will be focusing on providing care and health education needs of the underserved population," Kong says. "This demonstrates a fit of common values and the commitment of another $1 billion demonstrates CHI's commitment to support St Luke's growth and quality patient care."
"It will be interesting to see if they will receive regulatory approval for this transaction. Since CHI is already the second-largest non-profit hospital system in the US regulators are taking a closer look to make sure there's still fair competition and competitive pricing if they approve the merger."
The Right Reverend C. Andrew Doyle, Bishop of the Episcopal Diocese of Texas, said in prepared remarks that while the deal means that the Episcopal Diocese of Texas will no longer provide acute care, "this new foundation will address a widening gap in healthcare throughout our 57-county area. There is a care vacuum that must be addressed, including access to healthcare, prevention, community and environmental health, poverty, education and health disparities."
Wrong site surgeries and medication mishaps get all the gory malpractice headlines, but diagnostic errors are a larger, deadlier, and costlier problem, according to a study released Monday by Johns Hopkins researchers.
"We have said repeatedly that the fundamental premise is if you don't have the diagnosis right you can't possibly get the treatment right unless occasionally you get lucky," says David E. Newman-Toker, MD, an associate professor of neurology at the Johns Hopkins University School of Medicine and leader of the study being published online in BMJ Quality and Safety.
"The correct premise is that correct therapy begins with correct diagnosis. Unfortunately the entire medical profession operates under the collective delusion that diagnoses are almost always right," Newman-Tucker says. "There are all kinds of things we track in the hospitals; quality measures of one kind or another. But nobody is tracking whether or not their diagnoses are right. It's either ironic or scary but it's not good."
The Johns Hopkins researchers reviewed 350,706 malpractice claim payouts between 1986 and 2010 and found that diagnostic errors accounted for 28.6% of the claims, the most severe patient harm, and punitive payouts that amounted to $38.8 billion.
The study examined only a subset of claims that prompted a malpractice payout, but the researchers estimated that between 80,000 to 160,000 patients suffer misdiagnoses-related, potentially preventable, significant permanent injury or death annually across the nation.
Newman-Toker spoke with HealthLeaders Media about his findings. The following is an edited transcript of the interview.
HLM: Were the results you got the results you expected? N-T: We were anticipating most of the results. There were certain aspects of this that we expected, but there wasn't prior literature. For instance: The high frequency with which claims were associated with disability and not just death. That has not been previously looked at and that is one of the most important findings from the data we analyzed.
It really indicates that the magnitude of the problem as has been previously assessed through autopsy studies is a significant underestimate of the serious negative impact and harm associated with diagnostic error.
HLM: What seems to be the pitfall here? N-T: There are no quality measures that systematically ask the question 'What is our accuracy of diagnoses?' 'How often do we make diagnostic errors?' 'What is the impact of those diagnostic errors?' The call to action message from this paper and many others that we have tried to publish over the last five to 10 years to shed light on this problem is that we must systematically measure diagnostic errors. It must be a requirement and it must be part of the quality reporting guidelines in order for us to start tackling this problem."
HLM: What is the source of this diagnostic disconnect? N-T: I don't think it is arrogance, although some of it is overconfidence in the sense that we have a system that does not give us a great deal of feedback on the accuracy of our diagnosis. Not every patient gets the same follow-up. The patients who come back to see us come back because they are satisfied and they like us and they send us Christmas cards and knit us shawls and we think of ourselves as good diagnosticians as a result.
Unfortunately, the ones who don't come back are those who sought care elsewhere and got better treatment or unfortunately some of them ended up in a body bag. We never find out about those patients and that is worse in places like the emergency department, where they get virtually no follow-up on any of their patients either.
But it is also bad in primary care and other places where there isn't a mechanism whereby the system ensures that you will get follow up on all the patients who don't come back. We developed this delusional belief that because we are seeing patients in follow-up who are doing well that we must be right most or all of the time.
The other thing that is the fool's gold here is that most of the time our diagnostic mistakes don't harm patients. So we probably have a huge rate of diagnostic error. If you just look at autopsy data where the studies are reasonably clear and crisp around this issue 5% of autopsies done in hospitals suggest a Class 1 diagnostic error.
That means those are patients who died but had their diagnosis been correct they 'coulda, shoulda, woulda' left the hospital alive instead of in a body bag. That seems like a relatively small number. Certainly you can say 95% were right and that sounds good. But there weren't 95% all right. There is another 20% Class 2 error rate where we made major or significant misdiagnoses.
Then you start getting into other misdiagnoses that get further away from harm the rates get up into the 50% plus range. We are probably making diagnostic errors all the time, but we are lucky because the conditions don't kill people or it gets discovered later.
Because we don't see the harm very often, both because they are infrequent as a fraction of all the diagnostic errors we make and because the ones who die don't come back to see us when we systematically missed those events we have this kind of collective delusion that we are usually right.
HLM: What can hospitals or physicians do to improve on these misdiagnoses? N-T: Although there are a number of solutions that have been proposed, none of them are magic bullets. They range from simple check lists all the way to highbrow, computer-based diagnostic decision support. Those solutions are probably going to have to be used in concert in very dedicated ways to solve particular types of diagnostic error problems.
None of those solutions, all interventions described out there to reduce diagnostic errors, have ever been properly tested at the highest level of did 'I actually save anybody?' They have been proposed and described and tested on paper cases but never actually studied in practice. My view is there are a lot of potential solutions out there. But in order for those solutions to be properly tested we need to measure this on an ongoing daily regular basis.
HLM: Why aren't more hospitals or physicians taking it upon themselves to address this issue? N-T: There is right now no incentive to track diagnostic errors. In fact there is a disincentive. If no one is required to report it why would a hospital want to look under the rug and find all these dust bunnies; that their diagnostic error rate is 10% to 15 % of all their encounters?
That would look bad. There would be mass panic and confusion, particularly if they are the only ones saying it. That is the problem. Everyone is afraid to look at this issue and as long as no one forces them to look at it they are going to keep it under the rug as long as they can.
Consumer Reports has nearly doubled the number of hospitals that fall under the updated hospital safety ratings that the magazine first published last August.
However, the expanded review that began with 1,159 hospitals last year and has grown to include 2,031 hospitals still shows low scores across five measures: readmissions, complications, communication, the overuse of CT scans, and infections. The data from federal and state governments cover different time ranges, depending on the specific measure.
The average score for all hospitals was 49. Consumer Reports said.
"When it comes to healthcare, average should never be good enough, and this average is clearly not even close," John Santa, MD, director of the Consumer Reports Health Ratings Center, said in prepared remarks.
Santa said it was particularly worrying to see that almost two-thirds of the nation's 258 teaching hospitals that report enough data to calculate a safety score ranked below average. "Those hospitals should set the bar higher but that is not happening," Santa said.
In the New York City area, for example, 27 of the 28 teaching hospitals in the region scored below the national average. The exception: Winthrop University Hospital in Mineola, NY. Overall, 58 of the New York City area's 70 hospitals with a safety score ranked below average.
University of Connecticut Health Center, John Dempsey Hospital had the dubious distinction of earning a score of 17, the lowest score of any teaching hospital in the nation. Officials at the Farmington, CT hospital issued a lengthy statement challenging the Consumer Reports rating.
"This is the second Consumer Reports piece on hospital safety in less than one year. However, the current report is accessing data that is still more than two years old and does not reflect the fact that the Health Center has substantially improved, across the board, in safety metrics. As such, the report does not accurately portray the quality of care available at the UConn Health Center today," the statement read.
"We urge the public to also use other sources of information that are current, such as the U.S. Department of Health and Human Service's Hospital Compare website."
"According to Hospital Compare, in categories where statewide comparisons are available, the Health Center is above the Connecticut average in the majority of quality metrics. For example, current Hospital Compare data shows the Health Center, as compared to other local hospitals, among the best for:
Ensuring that all heart attack patients are given aspirin at discharge as well as a prescription for a statin at discharge, with scores of 100% and 99% respectively.
Assessing and providing pneumonia vaccine, with a score of 94%.
Making sure patients receive treatment at the right time to help prevent blood clots after certain types of surgery, with a score of 100%.
The hospital's rate of double CT scanning of the chest has been almost zero for the entire last year, and double-scanning of the abdomen has decreased by 62% since July of 2012."
Clinch Valley Medical Center in Richlands, VA, received a score of 14 from Consumer Reports, the lowest score in the nation. Beth Stiltner, the hospital's quality and risk manager told the magazine that its criteria for ratings represent "only a small piece of the entire hospital's performance." The hospital's Website notes that it was recognized this year by Virginia Hospital & Healthcare Association for improving patient safety.
Santa conceded that the Consumer Reports ratings have their limits.
"Our Ratings are an important measure, but they're not the only source you should consult. They don't, for example, assess how successful hospitals are at treating medical conditions," he said.
He encouraged patients planning a hospital stay to consult multiple sources, including Hospital Compare and Leapfrog Group.
In June, the Gingham Tree Resale Shop will celebrate its 40th anniversary as a major fundraiser for Advocate Good Samaritan Hospital in the Chicago suburb of Downers Grove, IL.
In fact, the shop is two years older than the hospital it supports. In the past 10 years Gingham Tree, located on the southeast corner of the hospital campus, has raised more than $2.1 million to support projects at the hospital that include upgrades to the Level 1 trauma emergency department and the pediatrics unit, a renovation of the cardiac catheterization lab, and new operating equipment for the surgical suites.
The shop, which is owned and operated by the hospital auxiliary, was one of four programs to receive the American Hospital Association's 2013 Hospital Award for Volunteer Excellence (HAVE) for "extraordinary efforts of volunteer programs and the positive impact their contributions have on the patients, hospitals, health systems and communities they serve."
"We sell everything. Our motto is 'You give us good stuff. We do great things,'" says Ausra Paronis, a co-supervisor of the 80 or so volunteers who work at Gingham Tree six days a week. "We go all the way from clothing to electronics to glassware, [and] dishes. Being on the property, we get a lot of associates and volunteers who will drop by. Our visitors are some of our biggest customers; our patients who are here for a test of some kind will drop by while they are waiting for the results or if their doctor is late."
Laura Neiberg, Good Samaritan's vice president, ancillary services and community health, says Gingham Tree and its volunteers "enhance our mission in a number of ways."
"Our core competency is building loyal relationships and having the shop is another way for us to build relationships with our communities, both with the opportunity for people in our community to have a place to donate things that they no longer need or want or have the ability to use. But it is also an opportunity for those in our community who may be less fortunate to have a place where they can shop reasonably."
Neiberg says the secret to the success of Gingham Tree is the volunteers. "There is a halo effect from the fact that it sits on the hospital campus," she says. "But I don't think its success is as much because it sits on the campus as it is about the volunteers who are so creative in reaching out to the community to make sure the donations are collected and to literally bring customers in."
"They market as well as any retail store. They will market to some of the senior residences in the area that might have buses where they can people around. They will create parties and events and reasons for people to come as a destination. They create fashion shows. They take the show on the road. They will bring items that have been recently donated to the shop and they may take them to some of our corporate buildings in the area that are owned by our parent company Advocate Health Care and they will set up tables and have an opportunity to show their wares. They create a trunk show and take it on the road."
Neiberg says the hospital provides an environment that keeps the 600 or so volunteers across the hospital operations engaged and which makes it clear to them that they are appreciated.
"It's not so much about the volunteer spirits as it is about the culture we create in the hospital," she says. "We view our volunteers as part of our workforce so we treat them in a similar manner to how we treat our paid workforce. When we are having some kind of a recognition ceremony for employees we make sure volunteers are included and invited. We want to create loyalty with volunteers the same way we are cognizant of creating loyalties with physicians and associates. People are volunteering. They could decide at any time that it's not worth it to them because they're not getting paid."
"It's about recognition. It's about making sure that we are creating volunteer pride as well as creating pride in the organization they are volunteering for. It is about having volunteers feel a loyalty to the organization that they would recommend the hospital to friends and family who need care, just as you would want an associate to do that. You want to make sure you are creating a personally rewarding experience for your volunteers."
All of this volunteer spirit isn't just a bunch of feel good pabulum. In addition to the money raised by Gingham Tree, Neiberg says the hospital has studied the practical effect of its volunteers across the spectrum of hospital operations and estimated that their combined hours of free service equaled that of 35 full-time employees.
With that in mind, Good Samaritan views volunteers as critical to hospital operations and, just as with paid staff, there is a strong emphasis on recruiting and retention.
"It's not just attracting the right people, but that you are able to keep the right people," Neiberg says. "The vast majority come from people out in the community looking for an organization they can be proud of and where they feel their time is going to be valued. It's a place where they would come for care or recommend it to their friends and family. They are looking for a place where they agree with the values of the organization. It is similar to what associates are looking for. The difference is these people don't get paid."
To make it work, Neiberg says successful hospitals have to build upon the relationships their volunteers.
"You want to make sure you have positive relationships between the volunteers and the coordinators and the hospital employees they are working with," she says. "You want to make sure they don't have a high level of stress. If it becomes too much of a hassle they will take their volunteer work someplace else where they feel they will have a more personally rewarding experience."
SSM Health Care and physician-owned for-profit Dean Health Systems announced jointly on Tuesday that they have signed an agreement to make Dean and its subsidiaries part of SSM.
SSM President/CEO William P. Thompson calls the deal "the next natural step in the evolution of our relationship and one that holds a lot of promise for both organizations."
The two providers have a long history of collaboration in Wisconsin with shared initiatives around value-based care and a jointly owned health plan.
"We want to take the capabilities that Dean has demonstrated in the relationships we have developed with them here in Wisconsin and transfer those through the rest of SSM," Thompson said.
"It brings together the two organizations that have been working together collaboratively for over 100 years so it doesn't really expand our footprint as much as it creates a new relationship between our two organizations."
The deal is expected to be finalized this summer, pending approval by Dean shareholders and federal and Wisconsin state regulators. Financial terms of the deal were not disclosed.
Craig Samitt, MD, president/CEO of Madison-based Dean, says the two organizations have built a national reputation for quality and that the move would create one of the most significant integrated delivery networks in the country.
"Dean and SSM have had a long successful tradition of 100 years of innovating and being one of the few organizations that pursued the value-based model long before the rest of the market moved in that direction," Samitt said.
The two companies already share an integrated delivery network that focuses population health in south central Wisconsin. Dean manages physician practices and SSM leverages geographic breadth and expertise in acute care. SSM and Dean jointly own Dean Health Plan, which covers more than 300,000 lives in the region.
"We thought if we have accomplished as much as we have as a virtually integrated system, imagine what we can do as a vertically integrated one," Samitt said. "We had discussions with SSM. We found that of all the parties we were speaking with, SSM was the best cultural strategic financial and operational fit for our system."
St. Louis-based SSM is one of the nation's largest Catholic health systems with more than 7,000 physicians and 25,800 employees operating in Wisconsin, Oklahoma, Illinois and Missouri. Dean's multispecialty system includes more than 500 physicians operating within a network of more than 60 clinics, the Davis Duehr Dean eye care, and Dean Pharmacy.
"By having an integrated system, we have concentrated on better care at a lower cost long before the Affordable Care Act was passed and accountable care came into vogue," Samitt said.
"We've made many innovations in our system really aimed at proving that a single organization can be highest in quality and lowest in cost at the same time. Our results demonstrate our success, ranging from Dean's status from the Wisconsin collaborative for healthcare quality. We are second in the state in a very high quality state; likewise SSM Wisconsin hospitals in their own quality measurement portfolios and as well in costs. As one of [the Centers for Medicare & Medicaid Services] ACOs… our average total cost of care is nearly 25% lower than the national average of ACOs. We see that as one of the best possible definitions of better care at a lower cost."
Adam C. Powell, a healthcare economist and president of Boston-based consultants Payer+Provider Syndicate, says news of the merger is not surprising.
"SSM Health Care and Dean Health Systems are not strangers, and have been discussing a merger for over a year," Powell wrote in an email exchange. "Dean and SSM have been partners for a century and have existing ties. SSM Health Care already owns about half of Dean Health Plan and a small stake in Dean Health Systems."
"What makes this deal interesting is that it appears to also be a for-profit to non-profit conversion. Dean will go from being a physician-owned for-profit to a subsidiary of a non-profit. Furthermore, SSM is Catholic, while Dean is not. As we have seen a recent wave of de-Catholization and for-profitization, this is a noteworthy counterexample," Powell said.
"Given the broader geographic scope of SSM Health Care, this merger should enable SSM to widely employ Dean's competencies at physician practice management. Many hospital systems are forming tighter linkages with physician practices in order to be able to more effectively manage costs and deliver high-value care," he said.
"This merger has the potential to give SSM Health Care greater ability to acquire and manage physician practices both in Wisconsin and throughout the Midwest."
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."
