In the span of an hour or so on Tuesday, Scranton, PA's hospital alignment underwent a seismic shift.
First, Community Health Systems, Inc. -- which acquired Scranton's Regional Hospital in April -- announced Tuesday morning that it will buy the nearby nonprofit Moses Taylor Health Care System. About one hour later, Geisinger Health System confirmed local media reports that it was acquiring the Community Medical Center, located near the CHS hospitals in Scranton.
CHS acquires Moses Taylor Health Care System "We are celebrating today. It's a great day for our community. The community is going to benefit. Our patients are going to benefit, and it's a tremendous stimulus in a market that has been long-identified as having to change," Moses Taylor CEO Karen Murphy, RN told HealthLeaders Media in an interview.
Murphy said the purchase price of the CHS acquisition would not immediately be made public because due diligence is still underway and the deal is not expected to be completed until 2012.
She said, however, that for-profit CHS will invest $60 million over five years in facility and technology upgrades for the health system, in addition to the $60 million the Franklin, TN-based for-profit hospital chain has committed for Regional Hospital.
"Our market is we have three acute-care hospitals within three city blocks. Our market just couldn't sustain the same business model," Murphy says. "We began a year ago to investigation possibilities. We were looking for a partner that would be able to provide capital and improve the quality and cost of healthcare of our community. With the collaboration between Scranton Regional and Moses Taylor, we are going to look at how we can increase quality and efficiency."
The health system includes the flagship 217-bed Moses Taylor Hospital in Scranton, the 25-bed Mid-Valley Hospital in Peckville, PA, and Physicians Health Alliance Inc. If the deal passes regulatory review, Moses Taylor will join the 13 hospitals in central and eastern Pennsylvania that are now affiliated with Franklin, TN-based CHS.
"The acquisition of Moses Taylor Health Care System will provide a compelling opportunity to expand our operations in northeast Pennsylvania, CHS Chairman/President/CEO Wayne T. Smith said in a media release.
"We look forward to working with the system's outstanding physicians and employees, who are part of a century-long tradition of providing high-quality, compassionate care for patients. We also look forward to new opportunities for collaboration, sharing of best practices, resources and expertise as we continue to expand and enhance the health services available in this region."
Moses Taylor and Regional will each continue to offer healthcare services on their respective campuses while the two hospitals work collaboratively to plan how they will deliver clinical services for the future. "Our agreement provides for a long-recognized community need — a consolidated healthcare delivery system," Murphy said.
The proceeds of the sale will be used to fund employee pension plans, retire the health system's liabilities and debt, and establish a nonprofit foundation to improve the health and well-being of the community.
The agreement assures:
Active employees will be hired into their same positions, at the same rate of pay and with their seniority recognized for a minimum of one year post-closing.
The health system providers will continue to provide charity care and participate in the Medicare and Medicaid programs.
A local board of trustees will be established in each of the organizations.
Moses Taylor will continue to participate in its residency and fellowship programs and will continue to support The Commonwealth Medical College.
CHS is one of the largest publicly-traded hospital companies in the nation and specializes in operating 133 acute care hospitals in non-urban and mid-size markets throughout 29 states. The announcement marks the completion of a 12-month exploration process.
Geisinger and Community Medical Center sign definitive agreement
Also Tuesday morning, not-for-profit Community Medical Center announced that it will merge and integrate into not-for-profit Geisinger.
"This has been a conscientious and deliberate decision, and we explored a number of options before our board unanimously voted to approve merger and integration into Geisinger," Robert P. Steigmeyer, CEO/president of CMC, said in a media release. "It was important for CMC to choose a quality-focused health system with proven success that mirrors our own charitable mission, values and standards of care."
As with CHS/Moses Taylor deal, Geisinger and CMC officials would not disclose the value of their merger. However, Danville, PA-based Geisinger said it would invest $158.6 million over seven years to enhance clinical programs, increase physician recruitment, expand and improve facilities, and implement new information systems—including Geisinger's electronic health record technology.
"This new relationship will allow the merged organization to build programs, grow services, improve health outcomes and demonstrate value," said Geisinger President/CEO Glenn D. Steele Jr., MD. "Together, we will enhance our ability to provide superior care and service for all the residents of Scranton and the surrounding area."
No layoffs for CMC's workforce are expected with the merger. The medical center will maintain its open medical staff that includes both employed and independent, community physicians. Steigmeyer will remain president/CEO at CMC, and two members of CMC's Board of Directors — Chair Jeff Jacobson and Vice Chair Virginia McGregor — will be added to the Geisinger Board of Directors.
The annual U.S. News & World Report hospital rankings generate significant marketing power for institutions that earn high honors. Just ask leadership at The Johns Hopkins Hospital in Baltimore.
For the 21st straight year, Hopkins has been named the nation's top hospital in U.S. News & World Report's Best Hospitals 2011-2012, placing first in five specialties and in the top five in 10 other categories.
"No matter how historic or iconic, a building is merely bricks and mortar. It's the dedicated people within that building who make it truly great," Edward D. Miller, MD, dean and CEO of Baltimore-based Johns Hopkins Medicine, and Ronald R. Peterson, president of The Johns Hopkins Hospital and Health System and executive vice president of Johns Hopkins Medicine, said in a joint statement.
"It's our caring nurses and staff, the school of medicine's faculty physicians, residents and fellows, and our many community physicians, all of whom dedicate themselves daily to providing the finest care to their patients. You are at the center of our continual search for better treatment, better answers and better discoveries. Our Hospital is exceptional because our people are exceptional."
The other Top Five finishers on the magazine's Honor Roll include at No. 2 Massachusetts General Hospital in Boston; No. 3 Mayo Clinic in Rochester, MN, No. 4 Cleveland Clinic; and No. 5 Ronald Reagan UCLA Medical Center in Los Angeles.
"Our purpose is to heal humankind, one patient at a time," said David Feinberg, MD, president of the UCLA Health System and UCLA associate vice chancellor for health sciences. "While we are pleased with this recognition, what really drives us is ensuring that every patient that comes through our doors gets care that is compassionate, safe, of the highest quality, and delivered with dignity and respect."
The 17 hospitals on the Honor Roll are picked from more than 5,000 hospitals in 94 metropolitan areas, and must rank at or near the top in at least six of the 16 specialties identified by U.S. News.
The latest rankings, issued Tuesday, showcase 720 hospitals, each of which is ranked among the country's top hospitals in at least one medical specialty and/or ranked among the best hospitals in its metro area.
"These are referral centers where other hospitals send their sickest patients," said Avery Comarow, U.S. News Health Rankings Editor. "Hospitals like these are ones you or those close to you should consider when the stakes are high."
The data used to measure the hospitals include death rates, patient safety, and procedure volume. Responses to a national survey, in which physicians were asked to name hospitals they consider best in their specialty for the toughest cases, also were factored in, U.S. News said.
"These are hospitals we call 'high performers.' They are fully capable of giving most patients first-rate care, even if they have serious conditions or need demanding procedures," Comarow said. "Almost every major metro area has at least one of these hospitals."
While popular with consumers and coveted among hospital marketers, the U.S. News rankings have generated questions about the objectivity of measures. In a study published in last year in the Annals of Internal Medicine, a Cleveland physician said the rankings were based on reputations that did not necessarily correlate with objective quality.
"I was thinking that if we did professional football this way, we would just say let's give the Super Bowl trophy to the Dallas Cowboys without them playing any games because they have a national reputation for being a good team," Ashwini Sehgal, MD, wrote. "I think the main message . . . is that the rankings are not really good measures of quality of care. They are simply measures of national reputation."
Federal auditors want the state of Louisiana to pay back $13.6 million that may have been improperly paid to primary care physicians to bolster rural healthcare in the years after Hurricane Katrina.
The audit of the Louisiana Department of Health and Hospitals Bureau of Primary Care & Rural Health found widespread noncompliance with the terms of a $50 million Professional Workforce Supply Grant.
The grant offered one-time payments to physicians that could be used for practice-related expenses, including paying off student loans, offsetting malpractice premiums, and relocation expenses. The incentives were designed to entice them to practice medicine for at least three years in greater New Orleans area in the years after the catastrophic August 2005 hurricane.
The Office of Inspector General review, however, found that many physicians did not complete the terms of their three-year contracts, were working at ineligible sites, did not work full time, and in at least one instance, may not have even practiced medicine.
A sample review by the Department of Health and Human Services' Office of the Inspector General of 100 practitioners who received grant money found that only 33 of the physicians were in compliance with the requirements of the federal grant.
The 67 who were not in compliance received more than $3.1 million.
Based on that sample, OIG estimated that from March 2007, through January 2009 the Bureau of Primary Care & Rural Health paid at least $13.6 million of federal grant funds to an estimated 509 practitioners who were not in compliance with the grant requirements.
"These errors occurred because the bureau did not follow its existing policies and procedures or did not have adequate policies and procedures to ensure that its contracts with practitioners obligated them to meet the 3-year service requirements, that practitioners were monitored for compliance with the Federal grant requirements, and that corrective action was taken for practitioners not in compliance," OIG said in the audit.
OIG recommended that Louisiana refund to the federal Centers for Medicare and Medicaid Services the more than $13.6 million paid for noncompliant grants, implement adequate safeguards to prevent a further occurrence, and take corrective action against physicians who were noncompliant after the audit period.
In a written response to the OIG findings, Gerrelda Davis, director of the Bureau of Primary Care & Rural Health, attributed much of the problem to "human error" a small staff, and the sheer workload in the months after the hurricane. "Due to the large amount of contracts being completed during that time frame, Bureau staff responsible for completing contracts was as diligent as possible with the limited number of staff assigned to process contracts," Davis said.
Riding with that recovery, says Ron Seifert of the Hay Group, is the expectation that healthcare organizations that want to keep quality staff should be prepared to pay more.
Seifert says a Hay Group survey shows planned median base salary increases of 3% this year for employees of large integrated health systems, up from a 2.4% increase in 2010.
“One of the things driving this is the conservatism of prior years,” Seifert tells HealthLeaders Media. “A little bit of angst gets built up in the system. There is a backlog of need for compensation adjustments. We are finding that healthcare organizations are recognizing that need and feeling the need to address it.”
Tellingly, independent community hospitals are reporting lower median base salary increases of 2.3% in 2011, Seifert says. That could make recruiting and retention efforts all the more difficult.
“This is a reflection of those organizations still operating in fairly challenging situations,” says Seifert, Hay Group’s healthcare sector vice president and executive compensation practice leader. “It’s not that integrated health systems are doing that much better, but they are a little further along in their journey and they have a stronger position in their negotiations and performance and success in creating a fully integrated care environment. Community hospitals don’t have that leverage. They will run the risk of not being able to recruit and retain the best and the brightest, at a time when they need to be offering a compelling value proposition to their employees.”
Oddly, the exact opposite trend is developing this year for senior leadership compensation. CEOs at not-for-profit integrated systems received a median 4% hike in base salary for 2010, while independent hospital CEOs saw an increase of 5%. The variation in total cash compensation (base salary plus annual incentives) is even wider in 2011: CEOs at integrated systems saw an increase of 3.1%, while independent hospital CEOs saw an increase of 6% in total cash.
“I would read that as a very quirky statistic. I would interpret that as an exaggeration of that pent up demand,” said Seifert, adding that hospital boards understand that the skills required to lead complex organizations like hospitals or health systems come at a premium.
Community hospitals in particular are loosening the purse strings. “They paid less than their counterparts in the integrated systems in prior years and in light of the current environment they really can’t afford executive turnover. We saw them making bolder adjustments, generally speaking.”
Boards and trustees are also warming to the idea of long-term incentive pay for senior executives. The Hay Group 2011 survey found that 79% of not-for-profit integrated health systems still offer annual incentive plans, but that number has fallen from 89% in 2007. Meanwhile, the use of long-term incentive plans among integrated systems has increased from 14% in 2006, to 25% in 2011.
“This is not an executive-driven change. It is a strategic shift in the thinking of boards and trustees,” Seifert says.
“These organizations are making significant investments now, whether it’s through their IT structures or their integrated network of physicians and ambulatory surgical centers,” he says. “These investments are not things that pay off in one year. These organizations are looking to the future. They have grappled with the management on a year-to-year basis and what these boards are recognizing is that an annual incentive plan doesn’t measure transformation.”
And while it wasn’t covered in the Hay Group survey, Seifert says healthcare senior leaders better get used to public scrutiny of their compensation. “Don’t expect it to wane until the economy picks up,” he says. “The average person can’t appreciate how much value an executive brings to an organization in a way that would cause them to be paid $400,000 or $500,000. It is something we could not explain to them no matter how much logic we use.”
Mergers and acquisitions in the healthcare industry surged in the second quarter of 2011, setting a pace to break all previous records in the sector as measured by dollars, according to Norwalk, CT-based Irving Levin Associates, Inc.
In the second quarter of 2011, a total of $73.5 billion was spent to finance 243 mergers and acquisitions in the healthcare industry, up 44% from the $51.1 billion spent in the first quarter of 2011, and up 61% from the $45.7 billion spent in the second quarter of 2010.
Medical devices ($33.1 billion), pharmaceuticals ($27.4 billion), biotechnology ($4.9 billion), and E-health ($639 million) accounted for $66.1 billion of the mergers and acquisitions in the second quarter.
Sanford Steever, editor of The Health Care M&A Report told HealthLeaders Media in an interview that the pace of mergers and acquisitions suggests that healthcare still remains a fragmented industry.
"In pharma and biotech in particular, there are a lot of drugs facing patent cliffs right now -- 2012 is going to be a horrendous year for some of the big drug companies," Steever says. "If they can't develop new blockbusters internally, they are going to try to buy them by acquiring biotechs. At the other end of the spectrum some have glommed on to the 'if-you-can't-beat-them-join-them' bandwagon and they're buying generic drug companies."
Steever says drug companies feel the need to diversify. "With medical devices, for them there is definitely a spurt in technological innovation.
Companies, particularly in orthopedics, are trying to get complementary technologies and hopefully get cheaper so the products can be cheaper because Medicare often contracts and says we are only going to pay so much for an implant and no more," he says.
The remaining $7.3 billion was accounted to mergers and acquisitions of providers, including hospitals ($3.5 billion), managed care ($1.6 billion, long-term care ($985 million), and physician practices ($416 million). Steever attributes a lot of the activity directly to healthcare reform.
"It's accelerating as hospitals are trying to build up their accountable care organizations."
"So," he said, "I am seeing far more deals involving hospitals acquiring physician groups to meet the needs of the ACOs. Hospitals definitely want to beef up their local and perhaps regional provider networks. They see strength in numbers and you can get efficiencies and economies of scale."
Managed care companies are also anticipating the effect of healthcare reform and attempting to diversify, Steever says. "That is one area that has been thrown into confusion by the implications of healthcare reform," he explained. "You are getting a couple of deals where managed care companies buy other managed care companies. I am seeing more instances of managed care companies diversifying their risk by buying into other sectors. Some are in sectors of technology like E-health, and others are in areas like retail outpatient workers' comp clinics. They're looking to buy services that don't rely necessarily on a managed care model."
Steever says the only thing that could slow down the pace of the mergers and acquisitions is if the federal government defaults. "That is driving people nuts on many fronts," he says. "We should have this settled in the next week or so, but stuff like that is exactly what tends to slow up activity. People aren't sure what their revenues are going to be."
It was the same scenario in 2010 as Congress wrangled with the healthcare reform bill. "The acquisition activity was impossible to predict. It was very slow," Steever says. "Once healthcare reform passed it really picked up. That is because people finally figured that we know we have what our revenues are going to look like. That means we can place a valuation on companies that want to buy or sell."
The average return on investment for a sample group of nonprofit healthcare organizations in fiscal year 2010 was 10.9%, a study shows.
The 2011 Commonfund Benchmarks Study Healthcare Organizations Report found that the 90 nonprofit healthcare organizations examined continued "a welcome follow-on" to the average 18.8% return posted in FY2009. The returns for FY2009 and FY2010 represent the best back-to-back annual performance in the nine years that the study has been conducted, and a dramatic shift from the investment returns of FY2008 that plummeted by an average of -21.2% in the recession-wracked year, the study showed.
ROUNDS: The Real Value of ACOs When: August 16, 12:00–3:00 pm ET Where: hosted by Norton Healthcare Register today for this live event and webcast
John Griswold, executive director at the Wilton, CT-based Commonfund Institute, said that two years of strong returns are a positive development for nonprofit healthcare organizations. But they barely moved trailing three-year returns into positive territory while leaving five-year returns in the 4% range.
"Continued strong performance will be needed to cover healthcare organizations' spending from endowment, investment management costs and inflation," Griswold said in a media release. "If we go back to the study for FY2007 before the losses of FY2008 trailing returns for three- and five-year periods were 9% and 11.1%, respectively. Returns at levels such as these are essential to support the missions of the nonprofit healthcare organizations over the long term."
The 90 nonprofit healthcare organizations represented $102.6 billion in investable assets and $42.3 billion in defined benefit plan assets. Investable assets include endowment/foundation funds, funded depreciation, working capital and other separately treated assets.
Griswold said that larger healthcare organizations with assets over $500 million reported average margins of 4.4% for FY2010 while those with assets under $251 million reported margins of 2.3%. "It appears that large hospitals and health systems have been able to reduce their operating expenses, increase operating efficiencies and capture greater economies of scale," Griswold said. "Healthcare reform -- specifically lower reimbursements -- pressures healthcare organizations to control costs, and will likely make them more reliant on support from their investable assets."
ROUNDS: The Real Value of ACOs When: August 16, 12:00–3:00 pm ET Where: hosted by Norton Healthcare Register today for this live event and webcast
Most healthcare organizations saw moderately lower returns on their investable assets in FY2010, when compared with other nonprofit sectors. The 175 independent and community foundations participating in the Commonfund Benchmarks Study Foundations Report posted an average return of 12.5% for FY2010.
The 69 charities participating in the Commonfund Benchmarks Study Operating Charities Report produced an average return of 11.6% for FY2010.
"Historically, healthcare organizations have higher allocations to fixed income securities than do foundations and operating charities, and in a good environment for equities that allocation likely served as a drag on relative return," Griswold said. Healthcare organizations' average 37% fixed income allocation in FY2010, compared to a 13% allocation among foundations and 20% among operating charities.
Domestic equities provided the best return in FY2010, with an average of 17.8%. Other asset class returns were international equities, 12.8%; alternative strategies, 9.9%; fixed income, 7.8%; and short-term securities/cash, 1.1%.
Within the larger alternative strategies category, the best returns came from distressed debt, 15.6%; commodities and managed futures, 15.4%; and energy and natural resources, 14.2%. Marketable alternative strategies including hedge funds, absolute return, market neutral, long/short, 130/30, event-driven and derivatives returned 7.4%, the study showed.
A Lakewood, WA oncologist and his wife face 20 counts of healthcare fraud and related charges for an alleged scheme to overbill Medicare and other government and private health plans by about $1.7 million for larger amounts of medicine than were delivered to patients, the Department of Justice said.
Alfred Hongleung Chan, 63, and Judy Yuan Chan, 62, face up to 20 years in prison if convicted of the charges, which include obstruction of justice and money laundering. The indictments were handed up earlier this year by a federal grand jury, and unsealed this week in U.S. District Court in Tacoma. Arraignment is scheduled for July 29.
The charges stem from a whistleblower False Claims Act suit by a former employee at the Chans' Lakewood clinic. The indictment and the civil suit allege that, beginning in 2006, Alfred Chan would make patient treatment notes on individual slips of paper which were given to his nurse. The notes specified the amount of drugs to be provided to a specific patient. After the nurse had provided the drugs to patients, the slips of paper were returned to Chan who shredded them. The doctor then made entries into a "Superbill" form, ostensibly recording the amount of medications the patients had received, DOJ said in a media release.
Evidence in the case, however, allegedly indicates that Alfred Chan recorded more medication administered than actually received by the patient, and claimed more time spent administering the medication than actually occurred.
Judy Chan then allegedly prepared the bills for Medicare and other government and private healthcare programs, using the inflated amounts, substantially increasing the amount of money owed to the Chans' clinic for medication.
The government alleges the scheme illegally boosted the clinic income by $1.7 million. Alfred Chan made false entries on patients' medical records so that they matched the billings. The records indicated that patients had received larger doses of various drugs than they had actually received, DOJ said.
The false statement, obstruction, and money laundering charges relate to steps allegedly taken by the Chans to hide their assets once they became aware of the government investigation. On a financial disclosure form required by the government, the couple didn't declare bank and brokerage accounts and properties owned by them. They allegedly transferred assets to shield them from the reach of law enforcement, DOJ said.
In an effort to reduce emergency department crowding, nine associations representing ED healthcare providers have signed a consensus statement that proposes standardized definitions for six common ED metrics.
Under the consensus statement, for example, an emergency department is defined as "a dedicated location serving an unscheduled patient population requesting emergency assessment," and triage time is defined as "the time that rapid or comprehensive triage is initiated by a registered nurse or institutionally credentialed provider."
AnnMarie Papa, RN, president of the Emergency Nurses Association, said that a standard set of metrics are needed to get everyone on the same page when looking for solutions to the nation's worsening ED crowding issue.
"Addressing it is one of ENA's top clinical priorities, but we can't solve a problem if we can't agree on how to quantify it," Papa said in a media release. "This consensus statement is a first and important step in reducing crowding and boarding in emergency rooms and helping us provide better and faster care to our patients."
Wait times in emergency departments are surging. The practice of boarding is a symptom of gridlock and prompts patients to leave the hospital without proper care.
ED transfer of care from pre-hospital providers' time;
ED triage time; and
ED treatment space time.
Robi Hellman, clinical practice manager, American Association of Critical-Care Nurses, said common metrics are needed because the sickest patients enter the nation's healthcare system through the ED. "Universally defined time stamps and intervals will ensure accurate patient hand-offsand consistency in health records," Hellman said.
The other organizations that signed onto the final statement are: the American Academy of Emergency Medicine; American Academy of Pediatrics; American College of Emergency Physicians; American Nurses Association; Association of periOperative Registered Nurses; Emergency Department Practice Management Association; and National Association of EMS Physicians.
A Toms River, NJ, man admitted to a federal judge this week that he posed as a physician and illegally treated hundreds of elderly patients and prescribed medicine as part of a Medicare fraud scheme.
Patrick Lynch, 54, pleaded guilty in U.S. District Court in Trenton to one count each of healthcare fraud and aggravated identity theft in connection with the scheme he orchestrated through Toms River-based Visiting Doctors of New Jersey. Federal prosecutors said Lynch conducted hundreds of visits with elderly, home-bound patients and billed them to Medicare.
"Patrick Lynch defrauded a government program designed to help Americans most in need of health support," U.S. Attorney Paul J. Fishman said in a media release. "To further his deception, he misused the identities of skilled professionals and put elderly patients at risk. Homebound individuals with pressing medical concerns should not have to worry that they are receiving substandard care from untrained hands."
Documents and statements connected with the investigation showed that Lynch created Visiting Doctors of New Jersey to provide care for elderly home-bound patients in the Monmouth and Ocean County areas. He hired licensed physicians and nurses to conduct patient visits but they quit when Lynch failed to pay them. So Lynch then posed as the medical professionals, using their names and government-issued ID numbers to write prescriptions and submit billings to Medicare, the Department of Justice said.
The healthcare fraud charge carries a maximum penalty of 10 years in prison and a fine of $250,000, or twice the gross gain or loss from the offense; the aggravated identity theft charge carries a mandatory sentence of two years in prison, to run consecutive to any sentence imposed on the healthcare fraud charge.
Sentencing is scheduled for Oct. 17. The amount that Lynch will be required to repay in restitution is still being determined, DOJ said.
"The threat to the public well being in this case is considerable," Michael B. Ward, Special Agent in Charge of the FBI's Newark field office, said in a media release. "Without sufficient training and lacking minimal credentials, Patrick Lynch attempted to profit by presenting himself as a licensed medical professional, conducting home healthcare visits with elderly patients, writing prescriptions, and falsely billing Medicare. His actions placed these unsuspecting patients at undeterminable risk."
An American Hospital Association survey of 820 hospitals across the nation found that almost all of them reported a drug shortage in the last six months, and nearly half of them reported 21 or more drug shortages.
That growing shortfall has prompted some patients to take less-effective drugs or delay treatment because of drug shortages, the survey showed.
"The number of drugs in short supply is increasing at an alarming rate and hospitals are working diligently to reduce the impact to the patients they care for," AHA President and CEO Rich Umbdenstock said in a statement Tuesday that came with the survey's release. "Clinicians need more notice about drug shortages so they have time to act to ensure that patient care is not disrupted."
Earlier this year Premier Inc., a hospital purchasing alliance, reported that the near-crisis shortage of drugs had reached a 10-year high. The lack of chemotherapy, sedation, and pain relief medications endangers patient safety and costs hospitals more than $200 million annually for higher priced substitutes, a Premier survey found.
The AHA survey found that in the last six months:
Hospitals report that they have delayed treatment (82%) and more than half were not always able to provide the patient with the recommended treatment
Patients got a less-effective drug (69%)
Hospitals experienced drug shortages across all treatment categories
Most hospitals rarely or never receive advance notification of drug shortages (77%) or are informed about the cause of the shortage (67%)
The vast majority of all hospitals reported increased drug costs as a result of drug shortages
Most hospitals are purchasing more expensive alternative drugs from other sources
The AHA made public the results of its survey at a Capitol Hill press conference that also endorsed bipartisan legislation to address the drug shortages. U.S. Reps. Tom Rooney (R-FL) and Diana DeGette (D-CO) are cosponsors of the "Preserving Access to Life-Saving Medications Act," which they said will improve patient safety by reducing shortages of life-saving drugs.
The bill would expand existing law to combat drug shortages by:
Requiring manufacturers of all prescription drugs, including biologics, to notify the FDA of any discontinuance or interruption in the production of a drug at least six months in advance;
Requiring manufacturers to notify the FDA as soon as possible in the event of an unplanned discontinuance or interruption;
Instructing FDA to publish these notifications and any drug shortage on its website, and work to distribute this information to appropriate healthcare providers and patient organizations; and,
Directing a GAO study to examine the possible causes of drug shortages, including manufacturing problems, breakdown in supply chains and delivery systems, and restrictive regulatory requirements.
The AHA, American Society of Clinical Oncology, American Society of Health-System Pharmacists, and Institute for Safe Medication Practices have endorsed the bill.
