Undoubtedly the Patient Protection and Affordable Care Act is providing for interesting times now for healthcare delivery in the United States. At this point, calling it a blessing or a curse would be guesswork.
Supporters of the PPACA cannot deny that implementation of the sweeping reforms will be a daunting task that may, ultimately, fail. Many critics of "Obamacare," however, have provided no realistic alternatives to bending an unsustainable healthcare cost curve beyond vaguely worded demands for vouchers, block grants, and buying health insurance across state lines.
One reason why the American Hospital Association and other hospital groups supported the PPACA was because of its pledge to expand health insurance to tens of millions of people now uncovered, including dependent children age 26 or younger. But as Moody's Healthcare Quarterly pointed out this month, that new revenue source for not-for-profit hospitals will be offset by Medicare reductions of $150 billion over the next 10 years, along with an additional $14 billion in Medicaid disproportionate share payments.
In addition, PPACA imposes new payment models that include lower reimbursements for hospitals with high readmissions and low patient satisfaction scores, and the effect of those is still unknown.
A study in the Archives of Internal Medicine estimates that safety net hospitals will take an additional hit on reimbursements because Medicaid patients tend to distrust the healthcare system and that distrust is reflected in their lower patient satisfaction scores.
Private payers will follow the government's lead and suffer less tolerance for cost-shifting, preventable errors and other quality issues.
As a result, Moody's deemed "credit neutral" the U.S. Supreme Court's ruling in June that PPACA is constitutional. The rating agency said the high court's decision would have no effect on a negative outlook for the not-for-profit hospital sector.
"Furthermore, significant uncertainty remains over the future of U.S. healthcare policy given the size of the federal budget deficit, which has increased since the passage of PPACA in April 2010," Moody's said. "For not-for-profit hospitals, which account for the vast majority of American hospitals, this uncertainty continues to heighten credit risk in an already pressured operating environment."
Causing more uncertainty for not-for-profit hospitals was the Supreme Court's concurrent ruling last month that removed penalties for states that refused to expand their Medicaid programs under PPACA. So far, the governors of Florida, Louisiana, Texas, South Carolina, and Mississippi have said they will opt out, and the governors of five other states have signaled that they are leaning that way.
"I stand proudly with the growing chorus of governors who reject the Obamacare power grab," Texas Gov. Rick Perry said this month in a letter to Health and Human Services Secretary Kathleen Sebelius. "Neither a 'state' exchange nor the expansion of Medicaid under this program would result in better 'patient protection' or in more 'affordable care.' They would only make Texas a mere appendage of the federal government when it comes to healthcare."
It's worth noting the grandstanding hyperbole in these election-year pledges to reject billions of dollars in federal money. Observers have noted that much of this opposition will quietly melt away after the polls close in November.
"It's easy to say right now, 'no, no, no, Obamacare is an abomination and Medicaid is dysfunctional,'" John Holahan, the director of the health policy center at the nonpartisan Urban Institute, told CBS News. "Long-term, it's an awful lot of money to give up and the hospitals need it and the managed health care plans need it… I think eventually they will figure out a way to say yes."
That may be true. But how much comfort can hospital executives in Texas and in her like-minded sister states take from assurances that their governors will "eventually" fold on the issue? How can anyone draw up a budget or offer with confidence projections for financial performance amid so much uncertainty?
At the same time that the PPACA provides a set of great challenges for hospitals, they are also struggling with other mandates such as the cost and complications associated with implementing meaningful use of electronic medical records and switching to ICD-10 diagnostic and procedural codes.
Ultimately, hospital leaders in the next decade will face some of the greatest challenges in U.S. healthcare history as they attempt to implement the sweeping reforms of PPACA and other mandates while maintaining financial viability in an era of lower reimbursements.
Outside of a war zone it is hard to imagine a more fluid, uncertain, yet rigorous set of metrics and demands that have to be met.
The newly validated Patient Protection and Affordable Care Act is expected to expand health insurance to as many as 40 million individuals now without coverage. This leads to the question: Who will see them?
With coverage expanded so extensively in such a relatively short time, the American Nurses Association believes that one of the most effective means of meeting the healthcare needs of these newly insured patients will be through advanced practice registered nurses.
"What we know about those patients through things like the National Center for Health Statistics and health interview surveys is that they have been deferring primary care: wellness, screening, well child care, and some chronic care meds," says Peter McMenamin, senior policy fellow at ANA. "Given insurance, they will have more access to healthcare and these are the kinds of things that APRNs and RNs are particularly well suited to do."
The U.S. Bureau of Labor Statistics' occupational outlook handbook estimates that by 2020 there will be a demand for 712,000 additional RN jobs. From 2010 through 2020 the demand for RNs is projected to grow by 26%, well above the 14% average growth rate for all occupations.
The good news is that the nation's nursing schools have doubled the size of their graduating classes over the past decade. The bad news is that there remain huge waiting lists for qualified nursing school applicants, mainly because of faculty shortages and limited access to clinical sites.
"It is not that the shortage is gone, but [that] there has been an increase in the younger cohort of nurses entering the workforce," McMenamin says. "In 2000 U.S. nursing graduates came to about 70,000. In 2011 U.S. graduates came to more than 140,000. It is changing the age distribution of the workforce but at the same time we have 3.1 million nurses, so even 100,000 a year don't change the distribution very quickly."
The ANA says the U.S. nurse workforce median age is 46 now and about half is nearing retirement.
"We have a lot of Baby Boomer-aged nurses and they have not retired because of the economy," says Janet Haebler, RN, associate director for state government affairs with the ANA.
"As that changes, or as they continue to age, we are going to see them leave. And it is a dramatic number of people. With the nursing schools, the enrollments are up, but we also have wait lists and part of that has to do with the shortage of faculty, and those individuals are also aging out. We can predict that if we don't make some dramatic changes that we are going to see another or continued shortage that is going to exacerbate in the next five to 10 years."
The ANA is focusing its efforts on maintaining Title VIII educational funding for nursing workforce development. In addition, it is hoping to address the huge turnover in RNs, many of whom leave the workforce within two years of graduating from nursing school.
Haebler says that can best be addressed by improving the nursing work environment. "We are always advocating for safe staffing levels, mandatory OT prohibitions, safe patient handling policies, workplace violence prevention programs. All of those factor into the work environment and retaining qualified nurses," she says.
Haebler says ANA is also working to loosen the constraints on scope of practice for APRNs, which was recommended by the Institute of Medicine's The Future of Nursing report.
"Specifically we're talking about things like the supervisory requirements and collaborative practice agreements where the physician who may never see the patient only reviews the records and the APRN is charged to have that agreement with that physician," she says. "We're talking about the limited prescriptive authority where APRNs may only be allowed to prescribe a Schedule II substance for a certain number of days and then the patient has to come back. That is not good for the patient. It is not necessary."
Haebler says lower-skilled healthcare workers might seem logical candidates to train and advance in the nursing ranks, but it's not that easy. "It has nothing to do with the fact that there is not access or availability. A lot of it has to do with basic education," she says.
"Nursing requires a strong background in sciences and many of these individuals did not choose the professional nursing route to begin with because they did not have that strong background. You have to have a foundation in chemistry and biology before you can take anatomy and physiology and nutrition and microbiology. Many people are thwarted because they have to go back and deal with the basics that they missed in high school. So many of the people had to struggle, they got discouraged."
The U.S. Supreme Court's ruling last month upholding the Patient Protection and Affordable Care Act resolved constitutional questions about the sweeping law. Now states are left with the challenge of implementing it.
And reports show a huge variance in readiness from state to state, particularly as it relates to health insurance exchanges.
"There are a number of states, about one dozen, that have made significant progress on their decision-making and what they are going to do about exchanges," says Sandi Hunt, a principal at PriceWaterhouseCoopers. "They have passed legislation. They have begun the process of planning for the exchange. But even those that are taking very active approach have a huge amount of work to do to be ready to go by 2014 and there are large numbers of states that have to make the decision to either accept the federal exchange or develop the state exchange."
Hunt says the biggest challenge for most states is deciding "how active they want to be in the health insurance market and if they want to be active how to do that in a way that makes the whole insurance market work," she says. "There are some important decisions to make in terms of how active the states want to be, if they just want to allow the health plans to offer whatever plans they want, or if they want to guide the market to more delivery system reform."
Hunt says the core issues that every state has to think through when devising their exchanges include questions on eligibility and insurance market reforms. "But the decisions each state makes are going to reflect their own circumstances. They all have to think about the same questions, but how they answer them is unique to their circumstances," she says.
For example, Utah is taking a free market approach with its exchanges and allowing relatively easy access to the exchange for anyone selling a health plan. "Other states want to provide more information to consumers and take more direction in how they offer products in the market," Hunt says.
Maggie Elehwany, vice president of government affairs and policy with the National Rural Health Association, says it's difficult to say what effect the health insurance exchanges will have in rural areas. "In theory it sounds good, but we don't know yet how it will play out," she says.
"Often if you look at rural areas, there isn't a choice. There are one or two plans. So this has the potential to expand options, which is great in theory. But we are concerned about a lot of the exchanges not doing the outreach to rural areas," she says. "We are intrigued with the co-op concept of different entities coming together to be able to have a plan. Dairy co-ops and wheat co-ops have been found to be effective in rural areas."
Elehwany says the nonpartisan NRHA did not endorse or oppose the ACA, but supported "building blocks" in the law that bolster access to healthcare in rural areas. The challenge now, she says, is to ensure that those building blocks are funded, particularly in critical areas that address provider shortages in rural areas.
"There was a significant expansion of the National Health Service Corps and a big investment in area health education centers which foster a program of growing your own physicians, nurse practitioners, that kind of stuff," she says. "We loved the redistribution of residency slots that targeted rural areas and the 10% bonus for primary care payments. Those were temporary. They may be funded for a short period and the funding will end."
On the Medicaid front, several states, including Florida, Wisconsin, Texas, Kansas, Maryland, and Louisiana, will also have to wait and see how the battle to expand their Medicaid programs plays out. The Republican governors of these states have said they will opt out of the ACA's call to expand Medicaid to insure more of their citizens. Texas Governor Rick Perry penned a letter to HHS Secretary Kathleen Sebelius, in which he describes Medicaid as "a system of inflexible mandates, one-size fits-all requirements, and wasteful, bureaucratic inefficiencies.
Nevertheless, even though the Supreme Court's ruling last month upheld the right to opt out of the Medicaid expansion, Hunt says the governors in those states will face mounting pressure to partake.
"The pressure is going to come from two places," Hunt says. "First there are millions of people who will be left out of health insurance reform if the governors decide not to go forward with Medicaid reform. And second the providers have been relying upon the Medicaid expansion as a way to cover those large numbers of uninsured."
Elehwany says many people who are otherwise firm supporters of rural healthcare may resist supporting any provisions of the ACA for fear of political blowback. "They don't want to look like they are supporting any part of it. That has been incredibly frustrating," she says.
"The great thing about being a rural health advocate is we have friends who are Democrats, Republicans, and Independents. But because some of these provisions are in healthcare reform, it is tainting that relationship."
The arrival of accountable care organizations creates another set of hurdles for rural providers. "ACOs are challenging to rural hospitals and rural providers because of the isolation and the low volume of patients they treat," Elehwany says. "They are worried the larger healthcare system might purchase them and they will lose their autonomy. Also per capita rural patients are older and sicker with a higher percentage of chronic diseases. The rural ACOs might not be able to demonstrate equally and be able to share in the savings that others envisioned in the ACOs."
On other fronts, the biggest single challenge to rural healthcare in the near term predates the ACA. Elehwany says it critical that Congress extends beyond the Oct. 1 expiration date the special funding status for about 200 rural Medicare dependent hospitals across the nation. "If they lose this Medicare reimbursement rate, we will be terribly concerned," she says. "We have heard a lot of facilities will close their doors if they lose this payment and that will cut off a lot of critical access to care for rural seniors."
Another antecedent of the ACA, the federal stimulus package, provides billions of dollars in funding to create or enhance access to healthcare information technology. Elehwany says that even with the incentive money for HIT improvements many rural providers are still hobbled by a lack of front-end capital, access issues and the aggressive timeframe for implementation.
"We think that it is a very laudable goal. HIT can probably nationwide reduced medical errors and lead the way to telemedicine which we believe is a way to overcome a lot of access issues in rural areas," she says. "But a lot of these facilities are small and they don't have the resources to purchase the materials or they don't have the staff. Often your CFO is also your HIT guy. So it is a capital issue. It's a workforce training issue."
"Some areas don't even have the broadband capabilities to do this. It is a big, expensive burden for a lot of small rural health facilities to bear," she says.
"Yes everybody wants to be up-to-speed. We love the carrot and we see the stick coming, but we need to realize that not everybody is on a level playing field. Some folks are going to need a little more time and a little more technical help."
Federal officials announced Monday that 89 Accountable Care Organizations opened on July 1 in 40 states and Washington, DC and will serve 1.2 million Medicare beneficiaries.
Jonathan Blum, principal deputy administrator anddirector of the Center for Medicare, said in a teleconference that another 400 provider groups have filed notice that they will apply to be in the next wave of shared savings ACOs that become operational on Jan. 1, 2013.
"That gives us even more confidence that this program will grow over time and more organizations will come in over time," Blum told reporters at a midday teleconference.
The 89 new ACOs bring to 154 the total number of provider groups in the voluntary Medicare shared savings initiatives. That includes 32 ACOs in the Pioneer ACO Model named last December by the Center for Medicare and Medicaid Innovation, and six Physician Group Practice Transition Demonstration organizations that began in January 2011.
As of July 1, more than 2.4 million Medicare beneficiaries are receiving care from shared savings ACOs, and almost half of the ACOs are smaller physician-led organizations that serve fewer than 10,000 beneficiaries, Blum says.
"What is significant is the degree of provider physician interest," Blum explains. "Contrary to some fears that were expressed last year, we have a very strong program that exceeds our goals for the first year. We have over 2.4 million beneficiaries being served by these ACOs and we really see this thing led by the physician community to improve patient care."
Blum says the Medicare Shared Savings Program, part of the 2010 Affordable Care Act, by some projections could save the Medicare trust fund up to $940 million over four years. However, he believes it’s too early to tell if the ACOs are already on their way toward the stated goals of saving money and improving care quality.
"Obviously this is going to be a key factor that we track very carefully," Blum says. "We have a very strong interest to ensure that beneficiaries get better services than they do today. We will make this data transparent to the public but it is too early to tell given that the program is still in its early stages."
Only five of the 89 new ACOs chose the so-called two-sided risk model that has greater earning potential but also puts providers on the hook if savings metrics fall short. Blum says "by far" most organizations chose the safer one-sided risk model, which pays only on achieved savings. All ACOs in their second contract period will have to take two-sided risk.
The 89 new ACOs were selected from an applicant pool of more than 150 providers. Beginning this year, ACO applications will be accepted annually. The application period for the Medicare Shared Savings Program that begins in January 2013 runs from Aug. 1 through Sept. 6.
Simeon A. Schwartz, MD, president/CEO of White Plains, NY-based WESTMED Medical Group, says the shared-savings program had the financial incentives to compel his 200-physician primary care-focused multispecialty practice to become an ACO.
"We think the savings are largely going to come out of hospital utilization because we see already in our organization that there have been many opportunities to move care to the outpatient setting," says Schwartz, who joined Blum on the midday teleconference.
"Because of the different price Medicare pays us versus the hospital for the identical service outpatient services in the physician setting is a big savings right there," Schwartz says. "Then if you are able to provide urgent care services instead of ER services that is a big savings. Finally if you have sufficiently coordinated outpatient programs working with community providers such as nursing organizations and others you are able to further decrease hospital utilization. We are hoping to see savings of 5% or 10% over the course of the three years of the program."
Schwartz says WESTMED has hired case managers to better analyze patient data, which will help the group identify and coordinate care for high-risk patients and plug other care coverage gaps.
"We consider it a trifecta," he says. "The government will do well, the patients will do well, and we will do well. And we hope it turns out to be successful."
The healthcare industry created 13,000 jobs in June, a significant drop from the sector's 33,300 new jobs in May. The overall unemployment rate, however, remained unchanged at 8.2%.
Nevertheless, Bureau of Labor Statistics data released Friday shows that healthcare created 169,800 jobs in the first half of 2012, which represent 18.7% of the 902,000 jobs created in the overall economy so far this year. Healthcare created 141,300 new jobs in the first half of 2011.
June Shelp, a lead author of theThe Conference Board Help Wanted OnLine monthly report, says she is seeing lots of "churn" among skilled clinicians in the healthcare labor market.
"The reason you see so many advertised vacancies for healthcare is that it is a fairly scarce commodity," Shelp says. "There aren't as many nurses and doctors as we'd like and they are much more prone to move and change when the opportunity is there, opening up grounds for other people."
That churn, Shelp says, suggests that there is growing confidence—at least among skilled healthcare workers—in their career prospects as the economy stumbles along.
"That tends to mean more people are looking for a job. They're willing to quit where they are and try something new. That is all somewhat positive. The net result is a lot of additional new hires," she says.
And even though skilled healthcare workers remain in high demand, Shelp says there is evidence that hospitals, physicians' offices and other healthcare employers are ready to replace low-performing or malcontent workers. "They are willing to get rid of the person who is not right," she says.
BLS data shows ambulatory services, which include physicians' offices, led healthcare with 4,800 new jobs in June. Nursing homes created 4,500 jobs and hospitals created 3,700 jobs. BLS data from May and June are preliminary and may be revised considerably in the coming months.
Shelp says "demand for nurses more or less has been in the same ballpark since 2005," when the HWOL data series began. "We're talking just under 250,000 ads a month that are looking for nurses, new ads and reposted ads," she says. "Because the number of people who are qualified for nursing jobs hasn't changed, we see what is beginning to grow is the demand for nursing assistants and a big increase in the need for healthcare support functions."
"I look at physical therapist, for example. That demand has gone up. Occupational therapists have definitely gone up. Physicians' assistants clearly have gone up," Shelp says. "When you can't find the right person, then you begin to change what it is exactly that you need."
In the larger economy, nonfarm payroll employment rose by 80,000 in June, led by modest job growth in professional and business services, temporary help services, and management and consulting services. Job growth in the overall economy has fallen steeply in the last four months after averaging 252,000 new jobs in both January and February, BLS reports.
Halfway through 2012, healthcare job growth is slightly ahead of the pace set in 2011, when healthcare created 296,900 jobs and accounted for more than 18% of the 1.6 million new jobs in the overall economy.
More than 14.3 million people worked in the healthcare sector in June, with more than 4.8 million of those jobs at hospitals and more than 6.3 million jobs in ambulatory services, which includes more than 2.4 million jobs in physicians' offices.
In the larger economy, BLS said 12.7 million people were unemployed in June, which was essentially unchanged from May. The number of long-term unemployed, defined as those who have been jobless for 27 weeks or longer, remained at 5.4 million people in June, representing 41.9% of the unemployed.
There's debate on whether or not that growth in the healthcare sector is healthy for the rest of the economy. Healthcare and education occupy an odd place in the overall economy as two sectors with positive job growth and negative per-worker productivity (as measured by the gross domestic output divided by the number of people working in the sector.) Every dollar that goes into healthcare is a dollar taken from elsewhere in the economy.
Shelp works in the realm of data and she is hesitant to predict the pace of healthcare job growth in the coming years, especially now that the constitutional questions around the Patient Protection and Affordable Care Act have been addressed.
"I don't do an awful lot of forecasting, but if I was thinking about it, given the population, I am not sure where we are going to go with this new healthcare piece that is out there," she says. "Clearly it is not going away. In fact there will continue to be demand. Exactly how that changes I don't know."
"Only 1% of Merritt Hawkins' search assignments in 2011/12 featured a solo practice setting, down from 2% in the previous year and 22% 11 years ago," the Dallas-based recruiters noted. The survey results are based on 2,710 permanent physician and allied professional searches that Merritt Hawkins/AMN Healthcare did from April 2011 to March 2012.
Kurt Mosley, vice president of strategic alliances at Merritt Hawkins, says he believes that two- and three-physician practices may soon be placed on the endangered list.
"The magic number now is six or more physicians. That is what it is going to take to survive," Mosley tells HealthLeaders Media. "I don't know exactly why, but it seems that groups of six or less are going to have a heck of a time making it because of cost and IT implementation and overhead. It's just not going to work."
Mosley says healthcare reform is demanding efficiencies of scale that solo or very small practices can't meet. "Compensation is down. Medicare and Medicaid are down. Some of these smaller groups are going to have to take all comers," he says. "Medicaid has always been tough but those state (health insurance) exchanges are going to be paid at Medicaid levels or less, and I don't see a lot of doctors except these solo guys taking it, which is going to mean less compensation."
In addition, he says, the initial cost hurdles to implement healthcare IT may be too high for smaller practices. "Even though they get their money back through the stimulus package, they can't afford to outlay that," Mosley says. "More importantly, they don't have the time to get trained on it."
Trending exactly in the opposite direction is the rise of physicians as hospital employees. The survey found that 63% of searches for physicians in the last year were for hospital employment; up from 56% in the previous year and only 11% eight years ago. At this pace within the next two years 75% of newly hired doctors will be hospital employees.
Mosley says employment seems to be a more popular option with younger physicians. "You see a lot of women gravitating towards hospital-based or site-specific jobs because it's set hours. They can work within their family schedule," Mosley says. "We also see a lot more women becoming hospitalists."
Nearly three-fourths of searches offered a salary and production bonus, and 54% of the bonuses are based on Relative Value Units. In addition, 35% of searches offering production bonuses featured a quality-based measure.
"The big theme I am hearing in the marketplace is that people know we have to go from volume to value but how we do that is still a mystery," Mosley says. "We are seeing them try to wean physicians off these volume-based rewards and wean them into quality measures. People are trying not to drive up to the wall going 60mph before they figure out how to stop."
The survey also found that:
For the seventh year primary care physicians led demand, and family physicians and general internists were the two most requested primary care searches.
Psychiatry was third on the list of most requested searches.
General surgery was the fifth most requested searches and the most requested surgical specialty.
Certain medical specialists, including ED physicians, orthopedic surgeons, OB/GYNs, pulmonologists, urologists, dermatologists, and hematologists/oncologists remain in strong demand.
Demand for some medical specialists has decreased. Radiology, which was Merritt Hawkins' most requested specialty in 2003, ranked 18th in 2011/12. For the first time in the history of the survey Anesthesiology was not among the 20 most requested searches.
Signing bonuses, relocation and continuing medical education allowances are standard in most physician recruitment packages.
Salaries have almost entirely replaced income guarantees. Only 7% of physician searches featured income guarantees, down from 21% in 2006/07 and 41% in 2003/2004.
Housing allowances were offered in 5% of recruiting searches, which was the same as last year but up from less than 1% two years ago. "We had a lot of doctors who couldn't move because they were upside down in their homes," Mosley says.
A stubborn line of demarcation exists between the haves and have-nots in the U.S. healthcare workforce. For skilled technicians and healthcare practitioners, there are more than two job openings for every qualified candidate. The Conference Board Help Wanted OnLine data series for June reports 615,800 online job ads seeking skilled healthcare workers, led primarily by the demand for registered nurses and physical therapists. The number of online job ads for this skill set grew by more than 28,000 in June, and the average hourly wage for those jobs was $34.97.
That factoid is turned on its head when examining the demand for healthcare support jobs such as nurses' aides, technology and clerical support staff, and phlebotomists. According to the Conference Board, there are two candidates for every healthcare support job, which paid an average hourly wage of $13.16.
"The pathways are pretty good on the professional and technical side. In theory you can go from a high school diploma to a nursing certificate to an LPN to a BA or a BSN to a master's degree," says Anthony P. Carnevale, director of the Georgetown University Center on Education and the Workforce.
But when it comes to career advancement opportunities for healthcare support staff, "There are almost none that we can find that get you from the support side to the professional and technical sides," Carnevale says. "There is the big valley there. It looks like the bridge between support and professional/technical is just not built."
"Support staff move into these jobs with minimal training and actually the amount of training is declining. More and more people in support have no certificate and no formal preparation," he says. "Where there is formal preparation it is minimal. We don't see movement out. There is a void and the difference between the two groups is very striking."
Yet even with their relatively low wages, healthcare support staff tend to be very loyal. "They show up for work and they stay. You would think these would be transitional jobs but they aren't," Carnevale says. "In low-wage labor markets there is lots of churn. That doesn't happen in healthcare. They stay on the job for a long time. There is a commitment, and we believe the commitment comes from the fact that, relatively speaking, this is a better job than the one they'd get if they left."
Carnevale says that test scores show that many healthcare support staff come from the bottom half of their high school classes. "But relative to other people in the bottom half of the high school class the healthcare support workers have more job security and they earn two to three grand more a year than the people who tested like them. From their point of view, this is as good a deal as they are going to get," he says. "But it is not a good deal. … These jobs tends to make people better off but they don't make them well off, that is clear."
The big hurdle for support staff remains the level of education. "When we look at the test scores typical of a healthcare support worker and the test scores of a professional and technical worker, there are about three to four school years of difference," Carnevale says. "The ability to move someone from support to professional technical is going to take a lot of doing."
Still, Carnevale says, the Georgetown center has examined years of national educational longitudinal surveys and estimates that about 20% of the healthcare support staff have the test scores that would suggest they are "highly trainable."
For any healthcare provider attempting to tap into its support staff for advanced training, Carnevale says the first step is to determine who has the basic skills. "Any community college has lots of tests you can give people to see if they are training-ready," he says. "All of the placement exams in community colleges and colleges do that pretty efficiently. You could find these people. You could tell them ‘If you want to join this program at entry level, you have to take the placement test.'"
Carnevale believes that hospitals and other healthcare providers should be promoting from within to fill vacant skilled positions. Rather than scouring the Internet to fill skilled healthcare job vacancies, he says healthcare providers could redirect some resources to identify and advance the best and brightest among the support workforce who are already on payroll.
"Obviously this is a missed opportunity," he says. "There are a fair number of people in support functions who, when we look at their test scores, look perfectly capable of training up. We know that is not going on in the aggregate. It may be going on here and there in little programs. I am struck that it is not more widespread because it seems so obvious that somebody would do this."
A sharply divided U.S. Supreme Court Thursday upheld key provisions of the Patient Protection and Affordable Care Act, including the contentious individual mandate that requires people to either purchase health insurance or pay a penalty.
Healthcare leaders say economic realities impel reform. The ruling will have no short-term effect on healthcare's soaring costs.
On a 5-4 vote, with Chief Justice John Roberts siding with the majority, the high court ruled that the individual mandate violated the Commerce Clause of the U.S. Constitution, but fell within the taxing authority of Congress.
"The individual mandate… does not regulate existing commercial activity. It instead compels individuals to become active in commerce by purchasing a product, on the ground that their failure to do so affects interstate commerce," Roberts wrote for the majority.
"Construing the Commerce Clause to permit Congress to regulate individuals precisely because they are doing nothing would open a new and potentially vast domain to congressional authority. Congress already possesses expansive power to regulate what people do. Upholding the Affordable Care Act under the Commerce Clause would give Congress the same license to regulate what people do not do."
Roberts went on to write that: "The Affordable Care Act's requirement that certain individuals pay a financial penalty for not obtaining health insurance may reasonably be characterized as a tax. Because the Constitution permits such a tax, it is not our role to forbid it, or to pass upon its wisdom or fairness."
The release of the ruling at 10 a.m. this morning was met with shouts and cheers and screams on the sun-bleached steps of the Supreme Court, reported HealthLeaders Media editor Joe Cantlupe.
Michael Newman, MD, a Washington, D.C.-based internist who practices a few blocks from the Supreme Court, was one of hundreds of bystanders outside the court. Wearing his white physician's coat, he praised the ruling.
"This will be a foundation for the future as we go forward to improve healthcare," Newman told HealthLeaders Media. "We recognize that healthcare is evolving and there are things that have to be improved, but there is no turning back now from what the Supreme Court has done."
Joining Roberts in the majority were Justices Sonia Sotomayor, Elena Kagan, Stephen Breyer, and Ruth Bader Ginsburg.
Justices Antonin Scalia, Clarence Thomas, Anthony Kennedy, and Samuel Alito dissented, and said in a joint statement that PPACA "exceeds federal power both in mandating the purchase of health insurance and in denying non-consenting states all Medicaid funding."
In his dissent Scalia wrote that the Obama Administration was engaging in sophistry on the issue of whether or not the individual mandate constitutes a tax or a penalty. In March the Administration had argued before the high court that the suit was not valid because the Anti-Injunction Act stipulates that a tax cannot be challenged until it has been collected.
"What the Government would have us believe in these cases is that the very same textual indications that show this is not a tax under the Anti-Injunction Act show that it is a tax under the Constitution. That carries verbal wizardry too far, deep into the forbidden land of the sophists," Scalia wrote in dissent.
In a victory for the 26 states that filed suit against PPACA, the high court called unduly coercive the provision to allow the Secretary of Health and Human Services to cut all Medicaid funding for states that choose not to participate in the Medicaid expansion under the Act.
"The threatened loss of over 10% of a State's overall budget is economic dragooning that leaves the States with no real option but to acquiesce in the Medicaid expansion," Roberts wrote.
"The Government claims that the expansion is properly viewed as only a modification of the existing program, and that this modification is permissible because Congress reserved the 'right to alter, amend, or repeal any provision' of Medicaid. But the expansion accomplishes a shift in kind, not merely degree."
"The original program was designed to cover medical services for particular categories of vulnerable individuals. Under the Affordable Care Act, Medicaid is transformed into a program to meet the healthcare needs of the entire nonelderly population with income below 133% of the poverty level. A State could hardly anticipate that Congress's reservation of the right to 'alter' or 'amend' the Medicaid program included the power to transform it so dramatically. The Medicaid expansion thus violates the Constitution by threatening States with the loss of their existing Medicaid funding if they decline to comply with the expansion."
HealthLeaders Media will continue reporting on the implications of the decision for healthcare leaders and their organizations.
When the U.S. Supreme Court makes public today its long-awaited ruling on the constitutionality of the Patient Protection and Affordable Care Act it will go down as a seminal day in the high court's history. It may even affect the outcome of the presidential election in November.
Whatever the ruling, however, it will have a limited effect on healthcare's soaring costs, and no effect in the short term. That is because many court watchers, legal scholars, politicians, and media bloviators looking through the narrow lenses of their own expertise and biases incorrectly view healthcare reform as a battle to be determined in legal or political arenas.
Most people inside of healthcare know that the politics, histrionics, and legal wrangling over "ObamaCare" are sideshows. The need for healthcare reform is being driven not by some socialist agenda but by money and the relentless increases in healthcare costs that are crippling other sectors of the economy.
The cost of healthcare in the United States, closing in on $3 trillion annually, will soon equal about 20% of gross domestic product, which is roughly twice as much as healthcare spending in any other industrialized country. That is unsustainable.
"Regardless of what the court decides, healthcare in this country is already changing and must keep evolving, because it's broken," Chris Van Gorder, president/CEO of San Diego-based Scripps Health said in a media statement this week. "This crisis presents a challenge and an incredible opportunity for physicians and hospitals to fundamentally reshape the future of healthcare."
Depending upon the forecaster, healthcare spending growth is projected to increase between 4% and 6% or higher in the next year and beyond, which well above the 2.3% rate of inflation as measured by GDP. Those rising healthcare costs will be reflected in the higher insurance premiums, deductibles, and co-pays for millions of Americans, along with the burden employers face carrying increasingly expensive coverage. That's money taken out of the economy for discretionary spending.
It is no coincidence that wages are stagnant but healthcare costs are not. Today's decision by nine justices won't affect that at all. It seems the biggest effect the PPACA legal battle has had is not with how the high court will rule, but with the months of uncertainty that has left many healthcare providers to wait for the dust to clear.
Patricia Webb, senior vice president and CHRO at Catholic Health Initiatives, told HealthLeaders Media back in April that the Denver-based health system could not afford to wait on the high court's ruling. "At the rate healthcare costs are growing we had to modify how we take care of patients and focus more on population health and preventive care that is going to happen and that is what needs to happen from our perspective," Webb said.
"It is driven more by the economics of it and, if for some reason, the Affordable Care Act is not passed and whatever happens, the population is still going to need to access healthcare and we have to be in a position to provide it," she said. "The best way to do that is to do it in a way that provides the quality that needs to be provided, with appropriate access in a cost effective way."
Rather than relying on a federal mandate or a Supreme Court ruling, Van Gorder says the solution to fixing the healthcare system is to focus on the patients rather than the providers or the payers. "That may sound obvious, but it could be argued that the current system was built for providers, not patients," he said. "If we do what's right for patients, we're never going to be wrong."
Advocates for rural healthcare providers are objecting to a Medicare Payment Advisory Commission report this month that says that access to rural healthcare services is "similar" to access in urban areas and that reimbursement for that care is "adequate."
"MedPAC's report simply doesn't match reality," Lance Keilers, CEO of Ballinger (TX) Hospital and 2012 National Rural Healthcare Association president, said in a media release. "This report lacks validity. It's not what I see every day in rural America."
Maggie Elehwany, NRHA's government affairs and policy vice president, says the MedPAC report to Congress waves two red flags in the faces of rural providers.
"The first is the assertion that access to care really is no longer a crisis in rural America. MedPAC for the first time ever made that inference and we take strong objection to that," Elehwany tells HealthLeaders Media. "In the rural counties in this country 77% are considered health professional shortage areas. For much of America just making their way to a physician still remains a challenge."
Elehwany says MedPAC contradicts itself on its claims of access.
"MedPAC says based on their interviews with different beneficiaries and some of their data, that because the number of encounters that a senior beneficiary has with a provider is relatively similar between a rural and an urban area, then that must not be an access problem," she says.
"But in the following sentence they state the reason that this is fairly similar is because rural patients have to travel to urban centers. To us that is so frustrating. That is the definition of an access problem if you are forced to travel to urban areas to get healthcare."
The second red flag flaps at MedPAC's suggestion that reimbursements to rural providers are on par with urban providers, if not better. Rural providers interpret those comments as a threat to the status of the 200 or so Medicare Designated Hospitals in this country with 100 beds or fewer that get a slightly higher reimbursement because 60% or more of their patients are Medicare beneficiaries.
In letters this week to the chairs and ranking members of the House and Senate "money committees" 23 advocacy groups, including NRHA and 11 state hospital associations, call for the extension of the Medicare Dependent Hospital designation, which will expire on Oct. 1 if Congress fails to act.
In addition, the letter warns that "hundreds more rural facilities will be severely harmed due to the October 1 expiration of the rural current 'low-volume' adjustment" for rural hospitals that incur higher incremental Medicare costs due to a low-volume of Medicare patients.
"When Congress shifted to the prospective payment system years ago, hundreds of rural hospitals closed. The system did not work for them," Elehwany says. "Congress intervened because rural patients were losing critical access points for healthcare. They created special hospital designations and they worked."
Elehwany says it's important to remember that senior populations in rural areas are quite vulnerable. "They are poor and have a higher percentage of chronic diseases than their urban counterparts and they are overall a sicker population," she says. "So these hospitals are treating these vulnerable individuals and no facility makes money on Medicare reimbursements. It's not like Costco where you can make up for it because you have this huge volume of other patients you are treating."
Elehwany believes that MedPAC's analysis is shortsighted and incomplete.
"When MedPAC says these rural payments aren't specifically targeted, or some are doing better than urban hospitals they don't do the math and take the next step and figure out what would happen to these small rural hospitals if they lost these payments," she says. "We believe these hospitals will be forced to limit services and cut staff and some will have to close their door."
Also, Elehwany says rural hospitals face still another threat to Medicare reimbursements if the 2% cuts mandated by sequestration take effect in January. Averting those cuts would also require election-year action from a gridlocked Congress.
"That 2% across-the-board cut through sequestration disproportionately harms rural providers," Elehwany says. "A large urban facility with a $200 million budget can probably find ways to tighten their belt and cut 2% somewhere. If you're a small rural hospital with maybe a $5 million budget, 2% is a very significant margin, which means you will probably have to cut services. More than 40% of rural hospitals are already operating in the red. Further cuts to Medicare may put some of those over and cause doors to close."
Rural healthcare advocates understand the powerful constituent clout that rural hospitals carry with each member of Congress. Senators and Congressmen don't want hospitals in their districts to close because it represents a trifecta of negativity; lost jobs, lost economic activity, and lost access to healthcare.
With that in mind rural healthcare advocates are urging anyone who cares about the topic to head to Capitol Hill on July 30-31 to make their concerns known to their member of Congress.
"Let them know how important these payments are, what they mean to keeping the doors in these rural hospitals in their districts open," Elehwany says.
The event comes immediately before the August recess and Elehwany says rural health advocates should use the face time at the Capitol to invite their respective members of Congress to the hospitals in their home districts "and show them the great work they are doing, show them the patients they treat and the narrow financial margins they are working under."
Even with the gridlock made worse during an election year, Elehwany believes that rural hospitals can make a strong and bipartisan argument for self preservation. "The climate on Capitol Hill is very different this year," she says. "Every program has to be justified and we are fine with that. We feel we can do that."
And despite the feisty rhetoric Elehwany says rural healthcare providers have no desire to pick a fight with MedPAC.
"We are trying to tell Congress that this report is incomplete," she says. "The rest of the story is that rural hospitals may be doing a little better than the days when everybody was closing but if you took those Medicare payments away and took that MDH status away we are going to go back to those days. We believe the program created by Congress is doing exactly what it was intended to do, which is keep these hospital doors open."
