Vermont's yet-to-be-defined leap into state-sponsored universal healthcare could cost as much as $9.5 billion by 2020, about double the $4.7 billion the state now spends on healthcare. That's roughly $14,000 for every person in the state.
But the state plan will still cost less than maintaining the current system of private plans, which could add an additional $550 million to $1.8 billion to the cost of healthcare in the state, according to new estimates released this week.
Whatever plan emerges will at best only slow the 7% annual increases in healthcare costs that are projected until 2020 under the status quo. Vermont, with an aging population and already aggressive coverage for the poor and under-insured, has seen some of the fastest growth in healthcare costs of any state in the nation. In 1992, healthcare represented 10% of the Vermont economy. In 2009, it represented nearly 19% of the state's economy.
"Achieving savings in healthcare spending is a difficult process. In this context, success is measured as reduction in the rate of growth—achieving absolute savings (spending less than in the prior year) is extremely unlikely," according to the report.
Although cost savings are a key component of the plan, the report cautioned that money should not be the only factor when measuring success. "Ultimately, accomplishments will be measured against several standards, including the health of the population, satisfaction of both providers and patients, and the financial sustainability of the system."
Nonetheless, the report said more precise estimates of any projected savings for state-sponsored universal care could be difficult right now because nobody really knows what the plan will look like.
"The actual savings will be determined by decisions yet to be made by the Green Mountain Care Board, the executive branch, and the general assembly, as well as the impact of national initiatives and policy changes, including the amount of federal financial support that we can anticipate," the report's authors wrote.
That savings would be dependent, for example, on cost-containment measures that include payment reform, delivery system changes, and reductions in provider costs—particularly simplifying administrative and paperwork costs that are now associated with private health plans.
If the healthcare system takes action on those and other cost-cutting measures, savings will begin in 2014 and "rise rapidly for the next several years," according to the report.
That savings will also require "substantial investments" in the program's infrastructure, which could cost between $50 million and $150 million.
The American Hospital Association and two hospital group purchasing organizations say they support President Barack Obama's executive order this week to reduce the nation's prescription drug shortage.
Steven Lucio, director for clinical pharmacy solutions at Novation, told HealthLeaders Media that the federal government really can't go much beyond the president's order. "This is a free market and that is what we have to understand. The government can't force drug companies to make products. Unless we want to change that -- and there is a lot of sensitivity these days about what it is practical for the government to do -- I don't think it can be done and I don't think it is appropriate."
Lucio says that the Food and Drug Administration now has only about four people in its drug shortage division monitoring anything from 178 to 211 drug shortages."Four people can't manage that," he said.
While there have been calls to ease restrictions on importing prescription drugs that are in short supply, Lucio says that probably wouldn't work all that well. "The problem is you can't find it," he said.
"If there is a product to be found they will go and try to get it. It's just [that] we can't take all the medication from Europe. However, if the FDA has greater notifications maybe they can do something with a foreign government that would have more time to respond. "
The executive order calls on the FDA to:
Press drug manufacturers to report as far in advance as possible on the potential shortages or discontinued product;
Expedite regulatory review of drugs; and
Review "certain behaviors" by market participants that could include hoarding drugs and reselling them at exorbitant prices
"The shortage of prescription drugs drives up costs, leaves consumers vulnerable to price gouging and threatens our health and safety," Obama said Monday in prepared remarks. "This is a problem we can't wait to fix. That's why today, I am directing my administration to take steps to protect consumers from drug shortages, and I'm committed to working with Congress and industry to keep tackling this problem going forward."
Blair Childs, senior vice president of Public Affairs at Premier healthcare group purchasing organization says that providers shouldn't wait on the government to supply all the answers to the drug shortage problem.
"There are things the government can do that are positive, but there are things we need to do in the private sector," he said. "We need to work with manufacturers and distributors to manage or mitigate the disruptions that occur in the market. How do we help ensure that the products are shared broadly and allocated effectively, that there is a heads up so that folks are preparing when there is an impending shortage. Those are the things we talk to distributors about."
Childs believes that much of the president executive order will do little if anything to solve the short-term shortage of prescription drugs. "But it will help reduced the problems in the longer term. The ultimate long term solution is they need to speed approval at FDA and also for both the new generic products and the active pharmaceutical ingredients," he said.
AHA Executive Vice President Rick Pollack said in a prepared statement that the order "comes at a critical time and is welcome news for hospitals and the patients they care for. The number of drug shortages has tripled in the last six years and the shortages are affecting patient care."
An AHA survey this year found that nearly 100% of hospitals reported a shortage in the past six months, but that most of them rarely -- if ever -- received advance notification of these drug shortages.
"Clinicians need more notice from drug manufacturers so they have time to act to ensure that patient care is not disrupted," Pollack said. "Hospitals are doing their best to reduce the impact of shortages by increasing inventories, buying alternative drugs and training clinical staff on how to deal with drug shortages."
While AHA supports the president's order, Pollack says Congress must step up to pass bipartisan legislation that requires drug companies to tell the FDA as soon as possible of interruptions in supply or discontinuations.
"In addition, we believe that obstacles must be removed so that FDA is able to streamline approval of drugs in shortage," Pollack said.
Online advertised vacancies for healthcare practitioners and technical occupations fell by 25,000 listings in October, snapping what had been two consecutive months of impressive gains for the sector, the Conference Board reports.
Healthcare practitioners and technicians—with 506,000 online job listings—posted the largest declines in online advertised vacancies among the top 10 occupation groups in the overall economy.
There were 17,900 and 26,300 new online job listings for healthcare practitioners and technicians in September and August, respectively, following a decrease of 61,200 listings in July.
The drop in job postings for healthcare practitioners was largely fueled by decreased ads for registered nurses and family and general practitioners. However, the number of advertised vacancies for these highly skilled medical professionals continues to outnumber job-seekers by 2.6 to one, with an average hourly wage of $34.27, according to The Conference Board Help Wanted Online report, which tracks more than 1,000 online job boards across the United States.
Healthcare support positions fell by 1,700 listings to 114,100 in October. There were 2.6 healthcare support job seekers for every job opening, and the positions paid$12.94 an hour, on average, the Conference Board reported.
In the overall economy, online job listings fell by 13,600 posts in October to about 3.9 million, after losing 44,000 job listings in September, 164,000 listings in August, 217,000 listings in July, and 100,000 listings in June. Nationally there were 10 million more unemployed people than job listings, or 3.5 unemployed people for every online advertised job vacancy.
“The good news is that labor demand did not deteriorate further in October, but at the same time we have no clear sign that demand is picking up,” said June Shelp, vice president at the Conference Board, in a media release.
The drop in demand of 513,000 job listings over the last seven months has largely offset the gain of 763,000 listings in early 2011, Shelp said, and narrowed the average monthly gain for 2011 to 25,000 job listings.
There is not much good news in a report from PricewaterhouseCoopers Saratoga that reviews the state of personnel departments at health systems nationwide.
Annual turnover – both voluntary and involuntary – at the 50 hospitals represented in the report dropped from 33.5% in 2008 to 26.2% in 2010, compared with 22.7% annual turnover for all industries in 2010. PwC Saratoga's Shebani Patel, the author of the report, credits much if not all of that decline in turnover to a weak economy and a bunker mentality that most workers in all sectors have adopted in a stagnant economy.
"It's not that all of a sudden the on-boarding and acquisition and assimilation process has become solid. It's that individuals are just happy to have a job," Patel tells HealthLeaders Media.
What is striking, however, is the report's notion that hospital HR departments spent an average of $701 per employee in 2010, while the industry average was $1,495. In addition, there were approximately 148 employees for every HR employee at hospitals, while the industry average was 91 employees per HR employee.
So, hospitals have higher turnover than most industries and hospitals underfund and understaff their HR departments compared with other industries. Is there a correlation?
"What we can say is the money that is invested in hospital HR tends to be more focused on the basics: getting people hired, benefits, and getting paid," Patel says. "Financial services or technology might focus on more strategic issues such as talent management, succession planning, leadership development, predictive analytics, how to use analytics to manage the workforce, how do we pay for performance, how do we identify and differentiate our high performers versus the overall population."
Strategic thinking takes data and other resources, and that requires money.
"When you don't have the budget, you don't have the resources to dedicate to that," Patel says. "That is not to say that is the way it is at all hospitals. Some hospitals are very effective in outsourcing more of the administrative components so that the dollars remaining are spent on more strategic elements. But the reality is that most are not there."
It is possible that some of hospital HR costs are hidden in what Patel calls "shadow HR spend" on services that might be performed by nurse supervisors and mentors during the on-boarding process. "Some hospitals have a particular function that focuses on retention. That may or may not fit within HR," she says. "The question becomes, is there cross collaboration so that the organization is effective in managing the workforce? I have clients who say every hospital in their system can do whatever they want for anything HR oriented. That creates a lot of fragmentation and redundancy and expense, where if certain things were centralized that could help the organization."
As the economy rebounds – however slowly – many workers will look elsewhere for new opportunities. Patel says there is already some evidence of that. "That's especially true for what we would consider pivotal roles that are absolutely critical to keeping the doors open, and also with high performers," she says. "People are still a bit uncomfortable about testing the waters and seeing what is out there but if you know you are good or you know you are in a role that is in high demand, you are more willing to look at what is out there."
Hospitals should not accept turnover as inevitable. "If you start to see this as part of the business cycle and expect that this is what it is, then that creates a problem because everyone just accepts it for what it is and nobody places attention on it," Patel says.
Patel says "a big missing component" for many people in hospital HR is their lack of experience with analytics and their discomfort with using data to help drive labor force decisions.
"We have a lot of individuals who are not, um, how do you say this? The business acumen isn't necessarily as strong," she says. "So traditionally it has been about 'how do we have happy employees? We are the people pleasers!' and less about 'how do we manage labor costs so we are delivering the highest return on workforce development?'"
That needs to change as hospitals look to contain labor costs and recruit and retain the best employees in a fiercely competitive environment, all within a limited budget. "HR is evolving into 'we want to operate like a business. We are here to manage the human capital of the organization and that requires operations and being comfortable with finances," Patel says. "Traditionally it has been the place that hears complaints. I hate it when I hear, 'I work in HR because I like people.' That drives me nuts."|
"Leverage data that HR might collect on exit and on-boarding with those that are handling retention programs to make sure they are effective," she says. "Look at systems with the technology that supports HR to make sure they can develop a workforce analytics capability."
Projecting future healthcare workforce demand is a backward-looking process that doesn't account for new technologies and other changes that greatly impact labor forecasts, according to a study from the Bipartisan Policy Center's Health Professional Workforce Initiative.
"It's a pretty simple formula. You take population growth times aging times prevalence of disease. How may are diabetic? How many have heart disease? Then we figure based on history that we need 2.2 visits per primary care doctor per year per capita. Then we add those up and come up to a shortage of 28,000 to 91,000 doctors."
New and immediate technologies that could greatly reduce in-person visits to the doctors' offices are not factored into this equation. "That assumes that all of those 2.2 visits were necessary and there were no other options that were either more attractive or affordable to consumers, like an e-visit," Keckley says.
"About 40% of visits to primary care physicians do not require physical examinations. You don't need to go to a doctor's office to get a script refilled, so we shouldn't be calculating the number of visits to doctors historically as the basis for determining how many we are going to need in the future when we have technologies that will replace some of that demand," he explains.
Improving healthcare workforce planning and development is a critical component of the Accountable Care Act, and Keckley says it's needed because labor costs are a huge driver of healthcare inflation.
One out of three respondents in the HealthLeaders Industry 2011 Survey cited labor costs as the top driver healthcare costs.
"The simple reason is that with 60% of the healthcare spend on payroll, compensation, labor costs, and with healthcare growing at 6% a year, you have to find better ways of reducing costs and the single biggest factor in healthcare is labor," he says.
"We have to find different ways to organized and train the workforce. We have to leverage technology to do things that technology does that today people might be doing. We have to recognize that the system, its incentives, its regulatory framework, the information we now have tells us there are better ways of doing things than having people show up in doctors' offices or have tests or procedures. The future is not a repeat of the past."
While identifying the problem may be relatively easy, Keckley says that fixing it could prove nettlesome. "Each profession has developed over the years its own methodology for determining supply and calculating demand," he explains. "Unfortunately those are not consistent across the professions. So we are finding it challenging to arrive at a common methodology for calculating demand."
Keckley adds that one of the biggest roadblocks toward determining healthcare workforce supply and demand may be the physicians themselves. He notes the dust up that ensued earlier this month after studies suggested that many prostate cancer screenings were not cost effective. "We have to get down to what is evidence-based and we need to build demand based on the evidence of what works instead of on what doctors say the evidence says. That is huge. That is a big deal," he says.
Organizations such as the Association of American Medical Colleges are already on board with the idea of healthcare workforce planning by exploring new concepts like team-based healthcare delivery and the use of technology and hard data. "Academic medicine seems to be already aligning its training programs with this new normal," Keckley says.
For any sort of workforce coordination and development to take hold, Keckley says, they will need the input and support of major medical trade groups. In addition, he says, any workforce development guidelines that develop should not be presented to healthcare providers as government mandates. "It has to become a set of tools, rather than rules. You can't regulate a workforce. You have to create tools so that market migrates to that model," he says.
He says that may prove to be a tough sell for many practicing physicians. "This is not being accepted quite as well is in Anytown, USA, where every one of these guilds likes to make its own rules and have no one else be a part of that discussion," he says. "How many doctors do you need on the staff at Anytown USA Community Hospital? Well, the medical staff wants to vote on that. They don't want to base that decision on input from anyone but the medical staff. So, if the government was to set out standards for the right demand of the workforce in your market and it was inconsistent with what a group of doctors said they wanted you'll have tension."
Earlier this month, senior leaders in the American Hospital Association descended on Capitol Hill to do their job -- lobby Congress to protect hospital funding from budget cuts.
Unfortunately, the hospital executives made a tactical error when they suggested that raising the Medicare eligibility age would be preferable to foisting more reimbursement cuts on hospitals.
That idea, one of 40 or so alternatives proffered by the hospitals, did not originate with AHA. That didn't matter. As soon as AHA aired it, they owned it.
Critics didn't see the three dozen or so other suggestions. The fact that the nation's hospitals would endorse cutting services for the elderly in the name of "shared sacrifice" and as an alternative to their own budget cuts immediately created bad will and adversaries both within Congress, and the public.
Stung by the backlash, the AHA now is pursuing a different, smarter tack.
In an Oct. 17 joint letter to the 12 members of the Joint Select Committee on Deficit Reduction Congressional – aka the "Super Committee" – AHA President Rich Umbdenstock, AHA Chairman John W. Bluford, American Nurses Association President Karen Daley, and CEO Marla Weston played up the financial stability that the nation's 5,000 or so hospitals provide in their communities. The two trade groups then warned the Super Committee that any significant cuts to Medicare or Medicaid "could create devastating job losses in our communities."
"While we recognize the serious fiscal pressures facing our nation, we feel it is counterproductive to target hospitals and the healthcare field for significant spending reductions at a time when we are providing economic stability and job growth in a sluggish economy," the ANA/AHA letter said.
This is a great tactic for several reasons –the best reason of which is that it's true. Now, instead of throwing other healthcare constituencies under the budget cut express, AHA/ANA are making a strong case for why they should be left unharmed.
And the fact is, the healthcare sector is an incredible job-creating machine. Any town with a doctor's office, a critical-access hospital, or a level-3 trauma center has a stake in this game. AHA and ANA are wise to bring this to the attention of lawmakers, all of whom have any number of respected and influential healthcare providers in their districts who will be hurt by Medicaid or Medicare cuts.
A little perspective: President Obama went to Detroit last week to tout the auto industry bailout, which by some estimates saved about 1 million jobs. Hospitals employ 5.4 million people. The healthcare sector employs more than 14 million people. That does not include the millions of "ripple effect" workers whose jobs are affected by the healthcare sector.
As I wrote earlier this month, U.S. Bureau of Labor Statistics data show that healthcare is creating jobs at a pace not seen in four years and is responsible for nearly one in four new jobs in the overall economy so far in 2011, and is on a pace to create 344,000 new jobs by year's end.
In September, I noted, healthcare employment rose by 43,800 jobs, representing roughly 42% of the 103,000 payroll additions in the overall economy. The 258,000 new healthcare jobs represent 24% of the slightly more than 1 million non-farm jobs created in 2011.
The case for healthcare job creation gets stronger if you consider that much of the September growth outside of healthcare was credited to the end of a two-week strike in August affecting about 45,000 telecommunications workers at Verizon. If those returning Verizon workers were factored out of the September growth, then healthcare would be responsible for 75% of the 58,000 new jobs in the economy for the month.
Those are jobs -- and voters -- in 50 states, in every city, in every town. With an election year looming, and at a when Republicans and Democrats say they are making job creation a top priority, AHA/ANA is making sure these lawmakers – and the public -- understand who is creating the jobs, and why their success shouldn't be messed with.
The AHA has estimated that the 2% reduction in Medicare payments that would be imposed automatically on Jan. 1, 2012 if the Super Committee can't come up with mandated budget cuts would cost hospitals about $41 billion through 2021. With labor consuming more than two-thirds of hospital spending, AHA says its calculations show that Medicare cuts would cost nearly 200,000 hospital jobs over the next decade.
You can argue whether or not the growth in healthcare sector jobs is good for everyone outside of healthcare. That job growth, after all, plays a part in fueling the nation's runaway and unsustainable healthcare expenditures, which now account for about 18% of gross domestic product.
That is a legitimate argument. But that is policy. This is politics. This is about defending your turf. This is about protecting your interests. It's a fight that hospitals and nurses can take to every home district in Congress. It's smart.
The average per capita cost of healthcare services covered by commercial insurance and Medicare grew 5.73% over the 12 months ending in August, representing a fourth straight month of modest acceleration of cost growth, Standard & Poor's Healthcare Economic Indices show.
The index posted its lowest annual growth rate in its six-year history -- +5.37% in April 2011. Since then, the rate of growth accelerated slightly each month. Healthcare costs easily outpaced the 3.8% growth in overall inflation as measured by the Consumer Price Index for the same 12-month period ending in August, Bureau of Labor Statistics data show.
A further breakdown of the S&P data show that for the year ending August 2011, healthcare costs covered by commercial insurance increased by 7.89%, as measured by the S&P Healthcare Economic Commercial Index.
During the same period, Medicare claim costs rose at an annual rate of 2.16%, as measured by the S&P Healthcare Economic Medicare Index. This was the lowest annual growth rate recorded for the Medicare Index in its six-year history. The Medicare index reported its highest annual growth rate of +8.02% in November, 2009, but has consistently and sharply decelerated by about 5.86 percentage points since then, S&P said.
"As the summer of 2011 ended, we continued to observe the recent trend of a deceleration in the annual growth rates of Medicare costs and a sustained acceleration in the annual rates of commercial healthcare costs," David M. Blitzer, chairman of the Index Committee at S&P Indices, said in the report. "With this month's data, the Medicare index is almost one-fourth of its peak annual rate of +8.02% recorded in November 2009. This is a very sharp deceleration."
The Hospital and Professional Services Indices reported increases of 5.43% and 5.84%, respectively, from their August 2010 levels. For the Hospital Index, this rate is slightly higher than the + 5.31% posted in July 2011. The Professional Services Index is marginally lower than its +5.89% rate posted in July.
"The increasing growth rate for hospitals is primarily due to rising rates of employment and wages," Blitzer said. "Professional services wages have also seen increasing rates during 2011; however, employment trends have declined over the same period."
The S&P Healthcare Economic Indices estimate the per capita change in revenues accrued each month by hospital and professional services facilities for services provided to patients covered under traditional Medicare and commercial health insurance programs. The annual growth rates are determined by calculating a percent change of the 12-month moving averages of the monthly index levels versus the same month of the prior year, S&P said.
"As we caution every month, these indices represent total costs not just prices, so increased costs could be due to prices going up, increased utilization, or some combination of the two," Blitzer said.
The highest annual growth rate for the S&P Composite index in the past six years was during the 12 months ending May 2010, when it posted +8.74%.
Even with approving nods for the changes announced last week in the final rules for Medicare accountable care organizations, observers who spoke with HealthLeaders Media say the program will remain a tough sell for most healthcare providers.
"I'm still not optimistic we are going to see a rush to the ACO door," said Michael Regier, general counsel and senior vice president of legal and corporate affairs for VHA Inc., the hospital purchasing group. "For organizations that today are not quite far along the clinical integration route there is still an enormous investment required in infrastructure. Even with the improvement in rules, I don't know that the opportunity for return of capital is going to be sufficient enough to entice folks into this care model."
ACCESS. INSIGHT. ANALYSIS.
Join the HealthLeaders Media Council
Get members-only access to industry-wide intelligence, forecasts, and analysis positions your organization to benchmark against your peers, identify and respond to key trends shaping healthcare, and make sound business decisions. JOIN TODAY
Nathan Kaufman, managing director of San Diego, CA-based Kaufman Strategic Advisors, LLC, is blunt. "My advice is to be a fast follower. Let somebody else do this," he says. "If they figure out how to make it work, these people will quit their jobs and become consultants and you can learn quickly from them how to do it."
On Thursday, the Centers for Medicare & Medicaid Services issued the long-awaited final rule for ACOs under the Medicare Shared Savings Program. After facing a barrage of criticism last spring when the proposed rules were made public, CMS backed down on several key points in the final product.
For example, CMS reduced from 65 to 33 the number of performance measures that providers would have to meet, removed the electronic health records requirement, eliminated financial risk for some providers, and switched from retrospective to prospective identification of the ACO patient population.
John Kelly, MD, managing director of Chicago-based Huron Healthcare, says that still won't be enough to lure many providers off the sidelines.
"They made a number of changes. They made a number of modifications. But nonetheless, the overall governance and reporting structure, the participation requirements, those remain largely unchanged," Kelly says. "As a result, for a hospital or system to put together an organization that would meet those requirements where the potential return would be greater than the cost, we think many will do the calculation and determine that, at least for now, this is not the direction they want to go down."
ACCESS. INSIGHT. ANALYSIS.
Join the HealthLeaders Media Council
Get members-only access to industry-wide intelligence, forecasts, and analysis positions your organization to benchmark against your peers, identify and respond to key trends shaping healthcare, and make sound business decisions. JOIN TODAY
Even with the concessions, Kaufman says ACOs remain fundamentally flawed because patients have "no skin in the game," and are free to go to other healthcare providers, which could bust an ACO's budget because they're held accountable for containing costs.
"The history of HMOs is if the patients don't have skin in the game, even though they know they are a member of the HMO and their primary care gatekeeper is a member of the HMO, if they don't have penalties for leaving the network, 20% to 30% of their care seems to get provided by out-of-network providers," he said.
In addition, he noted, hospitals that try to establish ACOs could risk alienating their specialists, who stand to lose when ACOs succeed in reducing hospital admissions.
"My advice to my clients is the best thing that could happen to them would be that their competitors do an ACO," he said. "Because the upfront investment in infrastructure will deplete their capital and then the political capital that they will have to invest to convince their specialists to participate in a program that potentially could reduce the specialists' revenue is going to drive the competitor's specialists to your hospitals."
Another problem, many observers say, is the sheer number of healthcare reform initiatives already underway, or soon to be launched. These include bundled payments, ICD-10, meaningful use, and value-based purchasing. All of this change is coming during a weak economy, with gridlock in Washington, DC, and with the possibility that the Affordable Care Act could be repealed if a Republican wins the White House in 2012.
Chris Van Gorder, CEO and president of San Diego's Scripps Health, says attempting to launch something as complicated as an ACO in such uncertain times is going to intimidate a lot of healthcare executives "who already have a lot on their plate."
"Don Berwick and CMS talked about eight new programs they just rolled out in the last few weeks, with more coming. They are very excited about it. From my perspective I'm saying 'Good God. Let us absorb some of this,'" Van Gorder said.
"Every time they come out with a new program we have to take the resources to analyze it, figure out how they interface with each other, which ones we want to participate in, he added. "While I applaud their innovation and creativity, it is actually calling a lot of administrative stress and cost as we are sitting there trying to analyze which direction we should take our healthcare system."
With so much to contemplate, Kaufman says ACOs will fall to the bottom of the priority list for a lot of providers.
"I sent a letter to CMS and told them 'You are inundating us with innovation,'" he says. "The same hospitals that are contemplating this are implementing meaningful use IT systems, for both inpatient and outpatient, and having to prepare for ICD-10, and having to prepare miracles and cure people, all at the same time. You have to pick and chose which one of these is going to have legs over the long term and which has the greatest potential for downside, and I think the ACO is that."
Not everyone is down on the prospects for ACOs. David Spahlinger, MD, an internist and senior associate dean at the University of Michigan Medical School, called removing the downside risk in the final rule "a game changer" that should be well received by physicians.
"My first selling point is there is a non-risk option for you to gain some experience without significant downside," he says. "Yes, you might have to make some significant investments. But the world is heading in this direction and we are going to be more accountable for the quality and the cost of the care we deliver."
"Here they are saying 'we will look at your current costs and if you can improve on them you will get some shared savings back. And by the way we will even do it in a non-risk fashion. Over three years if you get more savings you get 50% of that back," he said.
As for alienating specialists, Spahlinger says that the push to keep people out of the hospital is going to go forward with or without ACOs. "CMS is going to pull a bunch of levers over the next five years to try to reduce readmissions and inappropriate care and they are going to micromanage it even if you don't go into this ACO model," he says. "This model allows you to say what our current costs are, we improve upon it and we get 50% of it back."
The federal government's efforts to promote Medicare's new and highly toutedStar Quality Ratings for health plans is so far not reaching most of its target audience.
A survey released by Kaiser Permanente during the Medicare open enrollment period this month found that only 18% of Medicare-eligible seniors were familiar with the star quality ratings, and that less than one-third of those seniors used the ratings to pick their health plan. Further, only 2% of 483 Medicare respondents in the Harris Interactive poll said they knew the star rating for their plan.
Jed Weissberg, MD, senior vice president, Hospitals, Quality and Care Delivery Excellence, Kaiser Permanente, told HealthLeaders Media that the low levels of usage aren't that surprising because the Medicare Star Quality Ratings System is fairly new.
"That speaks to (the Centers for Medicare and Medicaid Services') challenge in communicating vital information to 44 million beneficiaries," Weissberg says. "CMS has just put together this very complicated composite measure system over the last year or so. They are starting to call more attention to the rankings, and they are getting experienced with it themselves still."
The star quality rankings compile 50 care quality measures, including preventive screenings, the management of chronic conditions, and customer service. The measures are put into a format that allows Medicare beneficiaries to shop and compare prices and services before buying a plan.
Kaiser Permanente was one of only 12 plans nationally that earned the coveted five-star rating. That select dozen are eligible for about $3 billion in incentive bonuses, and can market their plans throughout the year, and not just in the designated enrollment period. The quality ranking also includes a health outcomes survey which examines temporal changes in overall member health.
Although the KP survey shows most Medicare beneficiaries aren't using the quality rankings, Weissberg says it's probably not practical to expect that physicians or other clinician could help Medicare beneficiaries wade through the quality report. "That is not a task that too many physicians like to entertain because it is almost as confusing for the physicians as it is for the beneficiaries. I am hoping this will be as much a value to them as to the beneficiaries," he says.
And even though usage is low, Weissberg says "CMS has done its best to blend all of these multiple dimensions of quality and service and plan performance into one measure.
"They have taken advantage of prior consumer research looking at how consumers understand rankings and ratings and thus they chose the star system. So it is really a question of how do you get that star ranking in front of the consumer," he says. "I am hoping media and other public services will themselves go to the Website and make that information more available to members in a readily digestible form."
Kaiser Permanente's survey shows that less than 30% of respondents know where to find information about Medicare Star Quality Ratings. CMS offers details on its website. Kaiser Permanente introduced a websitefor the rating system and designed to provide easy answers to frequently asked questions about the system.
This phone survey of 483 Medicare-eligible seniors was conducted Sept. 21-25 by Harris Interactive on behalf of Kaiser Permanente, and has a sampling error of +/- 4 percent
Physician recruiters Merritt Hawkins this month issued a survey that found that more than 75% of new doctors received at least 50 job offers during their training. Nearly half of those new docs got 100 or more new job offers.
This is not surprising. Even in the worst economic stagnation since the Great Depression, doctors are in high demand for any number of reasons that we're all familiar with.
What is surprising, however, is that more than one-in-four of these young doctors – 28% of about 300 physicians in their final year of training say that if they had to do it all over again they'd choose another profession.
The new docs identify the usual suspects -- declining reimbursements, rising costs, malpractice concerns, and the changing landscape in the medical profession -- as the source of their dissatisfaction.
Well, cry me a river!
The fact that more than one-in-four young doctors regrets his or her career path is not alarming. It's maddening. My ire, however, is directed not at the Centers for Medicare & Medicaid Services or at trial lawyers, but at this bunch of soon-to-be-earning-six-figures whiners.
What exactly did you expect? What or who was the source of those expectations you embraced in your impressionable youth when you decided to dedicate your life to healing? What exactly were they telling you in medical school? More importantly, if your dedication to this noble profession is so fleeting that you're ready to quit before you've really even started, why did they admit you to medical school the first place? Isn't there a process to weed out people like you?
Katie Imborek, MD, a family physician who recently completed her residency at the University of Iowa Hospitals & Clinics, is emphatically not one of those young physicians who wishes she'd picked another career. However, she is not unsympathetic to the concerns of her disgruntled colleagues.
Imborek reminded me that the new physicians were surveyed by Merritt Hawkins during their last year of residency – a time of great stress, mental exhaustion, and uncertainty, during which young physicians are hugely in debt, have worked harder than they ever have in their lives, and have yet to see the financial rewards for their hard work.
"Even though it should seem like a tremendous time of optimism because they have a lot of job offers and then salaries will be better, it has still been a difficult journey for them," Imborek says. "They are finishing a time where they had absolutely no control over [their] time for three to seven years. Residency is very hard. They cut the work hours at 80 hours per week. They are working double a full-time job and most residents get paid $50,000. If you would make that an hourly wage it is pretty darn cheap labor where you are told when and where to be and it is a stressful situation for a long time," she says.
Dr. Imborek makes some excellent points, and it was cheering and reassuring to speak with her.
Perhaps these young physicians with second thoughts have been so deep into training that they haven't had the time to understand the reality that this nation has been facing for the last few years. If that is the case, it's time they caught up on current events.
Do you want to talk about changing landscapes, or uncertainty? Talk to the 6 million people who've been out of a job for 27 weeks or longer. You shouldn't have a hard time finding them. Check your local unemployment office, or just walk down to the ED. Losing your job and your home certainly changes the landscape.
Now, let's talk about what young physicians face when they enter practice. For starters, U.S. physicians are the highest-paid class of workers in the nation, if not the world, and they are in very high demand. Merritt Hawkins' annual physician compensation surveys show that, depending upon the specialty and experience, physicians can earn anywhere from $130,000 to $650,000 or more, plus other benefits.
Yes, most young docs are saddled with huge debts. That is a legitimate complaint. The Association of American Medical Colleges says that the average medical school student graduated with about $160,000 in student loans. However, because the demand for physicians is so great, not only are physicians highly compensated, job offers can include debt forgiveness incentives, most notably through the National Health Service Corp.
Meanwhile, outside of medicine, the average wage for all occupations is $44,410, roughly $16.27 an hour. But hey, wages increased 32 cents an hour from 2009, according the Bureau of Labor Statistics. I'm not sure how much that increase went towards health insurance premium hikes. That, of course, assumes that those workers have health insurance.
Here are some career alternatives for young docs who want out.
Convenience store cashier, third shift: Now, I'm a little uncertain what these folks earn, but it has to be close to $10 or $12 an hour, although I'm not sure if they offer any benefits. You get a colorful smock and nametag, all the Slim Jims and Slushies you can stomach, smoking breaks are a few steps away, and you may get the chance to practice emergency medicine when the place gets robbed or a drunk slips on the tiled floor.
Roof bolter in a coal mine: These are the guys who go into the coal mine before the other miners to make sure the roof is safe. If it's not safe, they drill a bunch of bolts into the rock to secure it. This usually works, except when it doesn't. In which case, tons of rock from the mile of earth above their heads comes tumbling down. They earn $23.97 an hour.
If you still want to be in the hospital setting but just not deal with the oppressive rigors of practicing medicine, you're in luck! Janitors can make about $12-$14 an hour, security guards earn about $10 to $12 an hour, and clerical help earns about $14 an hour, all according to the Bureau of Labor Statistics.
Yes, there are a lot of negatives associated with practicing medicine these days. But that holds true for just about every occupation. Times are hard. Everybody is hurting. Relatively speaking, physicians hold a privileged status in this country, which is reflected in their high compensation and the high esteem in which they are held by their communities.
Frankly, it's selfish and unseemly to complain about your career choices in a field that provides six-figure compensation for new hires, while millions of your fellow citizens -- through no fault of their own -- don't have a career.
Thankfully the Merritt Hawkins survey reminds us that 72% of new physicians -- such as Katie Imborek – are satisfied with the choice they made.
"I know that I am supposed to be doing this, which is exactly what I want to do with my life," she says. "I love the relationships I have with my patients and colleagues and I feel so very privileged and humbled by the experiences I get to share with families in times of great need. I do feel like I am lucky that I will be getting to make more money than I ever would have imagined doing a job that I love."